INTERNSHIP PROJECT REPORT PORTFOLIO MANAGEMENT IN RELIANCE COMMERCIAL FINANCE LTD 1
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INTERNSHIP PROJECT REPORT
PORTFOLIO MANAGEMENT
IN
RELIANCE COMMERCIAL FINANCE LTD
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ACKNOWLEDGEMENT
Undertaking any project in life proves to be a milestone in more ways
than one. Its successful completion relies on a myriad people and their
priceless help. I am deeply indebted to all who have inspired, guided and
helped me in the successful completion of the project. I owe debt of
gratitude to them, who were so generous with their valuable time and
expertise.
Through this acknowledgement I express my sincere gratitude towards
all those people who helped me in this project, which has been a learning
experience.
I am thankful to my guide and mentor Prof. Dipti Sharma for guiding me
throughout this study without their help this thesis would have not be
completed.
I appreciate the co-ordination extended by my friends and also express
my sincere thankfulness to the entire faculty members of Indian Institute
of Planning & Management, Delhi, giving me the opportunity to do this
project/study and also assisting me for the same.
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TABLE OF CONTENT
TOPIC
• Title page
• Completition certificate from the company / organization
• Acknowledgements
• Table of contents
• Executive summary
• Introduction
• Research objectives and methodology
• Body of the Report
• Industry Overview
• Reliance Commercial Finance Ltd – Company Details
• Competitors Information
• Primary findings and analysis
• An Assessment Of The Internship
• Recommendations
• Conclusion
• Annexure
• Bibliography
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EXECUTIVE SUMMARY
Reliance Commercial Finance aims to enable people fulfill all their
ambitions by creating assets for personal & business requirements.
It offers an exhaustive suite of financial solutions – Mortgages Loans,
Loans against property, Loans for Commercial Vehicles, Loans for
Construction Equipment, SME Loans, Auto Loans, business loans, Loans
against Securities and Infrastructure Financing
What’s more, with the help of our easy-to-use loan calculator, you can
decide on the tenure, interest rate and the loan amount that best suits you.
Reliance Commercial Finance has a loan book size of Rs. 13,927 crore
(US$ 2.8 billion), with a customer base of over 1,01,000 customers, as on
September 30, 2011, across the top 18 Indian metros.
Reliance Commercial Finance prides itself in creating customized
financial solutions for our partners and customers by offering greatTurnaround Time.
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INTRODUCTION
PORTFOLIO MANAGEMENT SERVICES
Portfolio (finance) means a collection of investments held by an
institution or a private individual. Holding a portfolio is often part of an
investment and risk-limiting strategy called diversification. By owning
several assets, certain types of risk (in particular specific risk) can bereduced. There are also portfolios which are aimed at taking high risks –
these are called concentrated portfolios.
Investment management is the professional management of various
securities (shares, bonds etc) and other assets (e.g. real estate), to meet
specified investment goals for the benefit of the investors. Investors may
be institutions (insurance companies, pension funds, corporations etc.) or
private investors (both directly via investment contracts and more
commonly via collective investment schemes e.g. mutual funds).
The term asset management is often used to refer to the investment
management of collective investments, whilst the more generic fund
management may refer to all forms of institutional investment as well as
investment management for private investors. Investment managers who
specialize in advisory or discretionary management on behalf of
(normally wealthy) private investors may often refer to their services as
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wealth management or portfolio management often within the context of
so-called "private banking".
The provision of 'investment management services' includes elements of
financial analysis, asset selection, stock selection, plan implementation
and ongoing monitoring of investments. Outside of the financial industry,
the term "investment management" is often applied to investments other
than financial instruments. Investments are often meant to include
projects, brands, patents and many things other than stocks and bonds.
Even in this case, the term implies that rigorous financial and economicanalysis methods are used.
Need of PMS
As in the current scenario the effectiveness of PMS is required. As the
PMS gives investors periodically review their asset allocation across
different assets as the portfolio can get skewed over a period of time.
This can be largely due to appreciation / depreciation in the value of the
investments.
As the financial goals are diverse, the investment choices also need to be
different to meet those needs. No single investment is likely to meet all
the needs, so one should keep some money in bank deposits and / liquid
funds to meet any urgent need for cash and keep the balance in other
investment products/ schemes that would maximize the return and
minimize the risk. Investment allocation can also change depending on
one’s risk-return profile.
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Objective of PMS
There are the following objective which is full filled by Portfolio
Management Services.
1. Safety Of Fund: -
The investment should be preserved, not be lost, and should remain
in the returnable position in cash or kind.
2. Marketability: -
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The investment made in securities should be marketable that
means, the securities must be listed and traded in stock exchange
so as to avoid difficulty in their encashment.
3. Liquidity: -
The portfolio must consist of such securities, which could be en-
cashed without any difficulty or involvement of time to meet
urgent need for funds. Marketability ensures liquidity to the
portfolio.
4. Reasonable return: -
The investment should earn a reasonable return to upkeep the
declining value of money and be compatible with opportunity cost
of the money in terms of current income in the form of interest or
dividend.
5. Appreciation in Capital: -
The money invested in portfolio should grow and result into capital
gains.
6. Tax planning: -
Efficient portfolio management is concerned with composite tax
planning covering income tax, capital gain tax, wealth tax and gift
tax.
7. Minimize risk: -
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Risk avoidance and minimization of risk are important objective of
portfolio management. Portfolio managers achieve these objectives
by effective investment planning and periodical review of market,
situation and economic environment affecting the financial market.
PORTFOLIO CONSTRUCTION
The Portfolio Construction of Rational investors wish to maximize the
returns on their funds for a given level of risk. All investments possess
varying degrees of risk. Returns come in the form of income, such as
interest or dividends, or through growth in capital values (i.e. capital
gains).
The portfolio construction process can be broadly characterized as
comprising the following steps:
1. Setting objectives.
The first step in building a portfolio is to determine the main objectives
of the fund given the constraints (i.e. tax and liquidity requirements) that
may apply. Each investor has different objectives, time horizons and
attitude towards risk. Pension funds have long-term obligations and, as a
result, invest for the long term. Their objective may be to maximize total
returns in excess of the inflation rate. A charity might wish to generate
the highest level of income whilst maintaining the value of its capital
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received from bequests. An individual may have certain liabilities and
wish to match them at a future date. Assessing a client’s risk tolerance
can be difficult. The concepts of efficient portfolios and diversification
must also be considered when setting up the investment objectives.
2. Defining Policy.
Once the objectives have been set, a suitable investment policy must beestablished. The standard procedure is for the money manager to ask
clients to select their preferred mix of assets, for example equities and
bonds, to provide an idea of the normal mix desired. Clients are then
asked to specify limits or maximum and minimum amounts they will
allow to be invested in the different assets available. The main asset
classes are cash, equities, gilts/bonds and other debt instruments,
derivatives, property and overseas assets. Alternative investments, such
as private equity, are also growing in popularity, and will be discussed in
a later chapter. Attaining the optimal asset mix over time is one of the
key factors of successful investing.
3. Applying portfolio strategy.
At either end of the portfolio management spectrum of strategies are
active and passive strategies. An active strategy involves predicting
trends and changing expectations about the likely future performance of
the various asset classes and actively dealing in and out of investments to
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seek a better performance. For example, if the manager expects interest
rates to rise, bond prices are likely to fall and so bonds should be sold,
unless this expectation is already
factored into bond prices. At this stage, the active fund manager should
also determine the style of the portfolio. For example, will the fund invest
primarily in companies with large market capitalizations, in shares of
companies expected to generate high growth rates, or in companies
whose valuations are low? A passive strategy usually involves buying
securities to match a preselected market index. Alternatively, a portfolio
can be set up to match the investor’s choice of tailor-made index. Passivestrategies rely on diversification to reduce risk. Outperformance versus
the chosen index is not expected. This strategy requires minimum input
from the portfolio manager. In practice, many active funds are managed
somewhere between the active and passive extremes, the core holdings of
the fund being passively managed and the balance being actively
managed.
4. Asset selections .
Once the strategy is decided, the fund manager must select individual
assets in which to invest. Usually a systematic procedure known as an
investment process is established, which sets guidelines or criteria for
asset selection. Active strategies require that the fund managers apply
analytical skills and judgment for asset selection in order to identify
undervalued assets and to try to generate superior performance.
5. Performance assessments
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In order to assess the success of the fund manager, the performance of the
fund is periodically measured against a pre-agreed benchmark – perhaps
a suitable stock exchange index or against a group of similar portfolios
(peer group comparison). The portfolio construction process is
continuously iterative, reflecting changes internally and externally. For
example, expected movements in exchange rates may make overseas
investment more attractive, leading to changes in asset allocation. Or, if
many large-scale investors simultaneously decide to switch from passive
to more active strategies, pressure will be put on the fund managers tooffer more active funds. Poor performance of a fund may lead to
modifications in individual asset holdings or, as an extreme measure; the
manager of the fund may be changed altogether.
Steps to Stock Selection Process
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Types of Assets
The structure of a portfolio will depend ultimately on the investor’s
objectives and on the asset selection decision reached. The portfolio
structure takes into account a range of factors, including the investor’s
time horizon, attitude to risk, liquidity requirements, tax position and
availability of investments. The main asset classes are cash, bonds and
other fixed income securities, equities, derivatives, property and overseas
assets.
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• Cash and cash instruments
Cash can be invested over any desired period, to generate interest
income, in a range of highly liquid or easily redeemable instruments,
from simple bank deposits, negotiable certificates of deposits,
commercial paper (short term corporate debt) and Treasury bills (short
term government debt) to money market funds, which actively manage
cash resources across a range of domestic and foreign markets. Cash is
normally held over the short term pending use elsewhere (perhaps for
paying claims by a non-life insurance company or for paying pensions), but may be held over the longer term as well. Returns on cash are driven
by the general demand for funds in an economy, interest rates, and the
expected rate of inflation. A portfolio will normally maintain at least a
small proportion of its funds in cash in order to take advantage of buying
opportunities.
• Bonds
Bonds are debt instruments on which the issuer (the borrower) agrees to
make interest payments at periodic intervals over the life of the bond –
this can be for two to thirty years or, sometimes, in perpetuity. Interest
payments can be fixed or variable, the latter being linked to prevailing
levels of interest rates. Bond markets are international and have grown
rapidly over recent years. The bond markets are highly liquid, with many
issuers of similar standing, including governments (sovereigns) and state-
guaranteed organizations. Corporate bonds are bonds that are issued by
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companies. To assist investors and to help in the efficient pricing of bond
issues, many bond issues are given ratings by specialist agencies such as
Standard & Poor’s and Moody’s. The highest investment grade is AAA,
going all the way down to D, which is graded as in default. Depending on
expected movements in future interest rates, the capital values of bonds
fluctuate daily, providing investors with the potential for capital gains or
losses. Future interest rates are driven by the likely demand/ supply of
money in an economy, future inflation rates, political events and interest
rates elsewhere in world markets. Investors with short-term horizons and
liquidity requirements may choose to invest in bonds because of their relatively higher return than cash and their prospects for possible capital
appreciation. Long-term investors, such as pension funds, may acquire
bonds for the higher income and may hold them until redemption – for
perhaps seven or fifteen years. Because of the greater risk, long bonds
(over ten years to maturity) tend to be more volatile in price than
medium- and short-term bonds, and have a higher yield.
• Equities
Equity consists of shares in a company representing the capital originally
provided by shareholders. An ordinary shareholder owns a proportional
share of the company and an ordinary share carries the residual risk and
rewards after all liabilities and costs have been paid. Ordinary shares
carry the right to receive income in the form of dividends (once declared
out of distributable profits) and any residual claim on the company’s
assets once its liabilities have been paid in full. Preference shares are
another type of share capital. They differ from ordinary shares in that the
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dividend on a preference share is usually fixed at some amount and does
not change. Also, preference shares usually do not carry voting rights
and, in the event of firm failure, preference shareholders are paid before
ordinary shareholders. Returns from investing in equities are generated in
the form of dividend income and capital gain arising from the ultimate
sale of the shares. The level of dividends may vary from year to year,
reflecting the changing profitability of a company. Similarly, the market
price of a share will change from day to day to reflect all relevant
available information. Although not guaranteed, equity prices generally
rise over time, reflecting general economic growth, and have been foundover the long term to generate growing levels of income in excess of the
rate of inflation. Granted, there may be periods of time, even years, when
equity prices trend downwards – usually during recessionary times. The
overall long-term prospect, however, for capital appreciation makes
equities an attractive investment proposition for major institutional
investors.
• Derivatives
Derivative instruments are financial assets that are derived from existing
primary assets as opposed to being issued by a company or government
entity. The two most popular derivatives are futures and options. The
extent to which a fund may incorporate derivatives products in the fund
will be specified in the fund rules and, depending on the type of fund
established for the client and depending on the client, may not be
allowable at all.
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A futures contract is an agreement in the form of a standardized
contract between two counterparties to exchange an asset at a fixed price
and date in the future. The underlying asset of the futures contract can be
a commodity or a financial security. Each contract specifies the type and
amount of the asset to be exchanged, and where it is to be delivered
(usually one of a few approved locations for that particular asset). Futures
contracts can be set up for the delivery of cocoa, steel, oil or coffee.
Likewise, financial futures contracts can specify the delivery of foreign
currency or a range of government bonds. The buyer of a futures contract
takes a ‘long position’, and will make a profit if the value of the contractrises after the purchase. The seller of the futures contract takes a ‘short
position’ and will, in turn, make a profit if the price of the futures
contract falls. When the futures contract expires, the seller of the contract
is required to deliver the underlying asset to the buyer of the contract.
Regarding financial futures contracts, however, in the vast majority of
cases no physical delivery of the underlying asset takes place as many
contracts are cash settled or closed out with the offsetting position before
the expiry date.
An option contract is an agreement that gives the owner the right, but
not obligation, to buy or sell (depending on the type of option) a certain
asset for a specified period of time. A call option gives the holder the
right to buy the asset. A put option gives the holder the right to sell the
asset. European options can be exercised only on the options’ expiry
date. US options can be exercised at any time before the contract’s
maturity date. Option contracts on stocks or stock indices are particularly
popular. Buying an option involves paying a premium; selling an option
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involves receiving the premium. Options have the potential for large
gains or losses, and are considered to be high-risk instruments.
Sometimes, however, option contracts are used to reduce risk. For
example, fund managers can use a call option to reduce risk when they
own an asset. Only very specific funds are allowed to hold options.
• Property
Property investment can be made either directly by buying properties, or
indirectly by buying shares in listed property companies. Only major institutional investors with long-term time horizons and no liquidity
pressures tend to make direct property investments. These institutions
purchase freehold and leasehold properties as part of a property portfolio
held for the long term, perhaps twenty or more years. Property sectors of
interest would include prime, quality, well-located commercial office and
shop properties, modern industrial warehouses and estates, hotels,
farmland and woodland. Returns are generated from annual rents and any
capital gains on realization. These investments are often highly illiquid.
Types of Portfolios
The different types of Portfolio which is carried by any Fund Manager to
maximize profit and minimize losses are different as per their
objectives .They are as follows.
• Aggressive Portfolio:
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Objective: Growth. This strategy might be appropriate for investors who
seek High growth and who can tolerate wide fluctuations in market
values, over the short term.
• Growth Portfolio:
Objective: Growth. This strategy might be appropriate for investors who
have a preference for growth and who can withstand significant
fluctuations in market value.
• Balanced Portfolio :
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Objective: Capital appreciation and income. This strategy might be
appropriate for investors who want the potential for capital appreciation
and some growth, and who can withstand moderate fluctuations in
market values
• Conservative Portfolio:
Objective: Income and capital appreciation. This strategy may be
appropriate for investors who want to preserve their capital and minimize
fluctuations in market value.
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TECHNIQUES OF PORTFOLIO MANAGEMENT
Various types of portfolio require different techniques to be adopted to
achieve the desired objectives. Some of the techniques followed in India
by portfolio managers are summarized below.
(1). Equity portfolio-
Equity portfolio is affected by internal and external factors:
(a) Internal factors – Pertain to the inner working of the particular company of which equity
shares are held. These factors generally include:
• Market value of shares
• Book value of shares
• Price earnings ratio (P/E ratio)
•
Dividend payout ratio
(b) External factors –
• Government policies
• Norms prescribed by institutions
• (3) Business environment
•
(4) Trade cycles
(2). Equity stock analysis –
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The basic objective behind the analysis is to determine the probable
future – value of the shares of the concerned company. It is carried out
primarily fewer than two ways. :
• Trend of earning: -
A higher price-earnings ratio discount expected profit growth.
Conversely, a downward trend in earning results in a low price-
earnings ratio to discount anticipated decrease in profits, price and
dividend. Rising EPS causes appreciation in price of shares, which benefits investors in lower tax brackets? Such investors have not
pay tax or to give lower rate tax on capital gains.
Many institutional investor like stability and growth and support
high EPS.
Growth of EPS is diluted when a company finances internally its
expansion program and offers new stock.
EPS increase rapidly and result in higher P/E ratio when a
company finances its expansion program from internal sources
and borrowings without offering new stock.
• Quality of reported earning: -
Quality of reported earnings affects P/E ratio. The factors that affect the
quality of reported earnings are as under:
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Depreciation allowances: -
Larger (Non Cash) deduction for depreciation provides more
funds to company to finance profitable expansion schemes
internally. This builds up future earning power of company.
Research and development outlets : -
There is higher P/E ratio for a company, which carries R&D
programs. R&D enhances profit earning strength of the company
through increased future sales.
Inventory and other non-recurring type of profit : -
Low cost inventory may be sold at higher price due to
inflationary conditions among profit but such profit may not
always occur and hence low P/E ratio.
(C) Dividend policy: -
Dividend policy is significant in affecting P/E ratio. With higher dividend
ratio, equity price goes up and thus raises P/E ratio. Dividend rates are
raised to push in share prices up. Dividend cover is calculated to find out
the time the dividend is protected, In terms of earnings. It is calculated as
under:
Dividend Cover = EPS / Dividend per Share
(D) Investors demand: -
Demand from institutional investors for equity also enhances the P/E
ratio.
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PORTFOLIO MANAGEMENT SERVICES IN RELIANCE
COMMERCIAL FINANCE LIMITED
•
• Pro Prime
Product Approach
Investment will be keeping in mind 3 investment tenets.
• Consistent, steady and sustainable returns.
• Margin of Safety
• Low Volatility
Product Offering
Pro Prime is the ideal for investors looking at steady and superior with
low and medium risk appetite.
The portfolio consists of a blend of quality blue chip and growth stocks
ensuring a balanced portfolio with relatively medium risk profile.
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PMS
Pro Prime
Pro
ArbitragePro Tech
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The portfolio constitutes of relatively large capitalization stocks, based
on sector and themes which have medium to long term growth potential.
Product Characteristics
• Bottom up stock selection
• In depth ,independent fundamental research
• High quality companies with relatively large capitalization
• Disciplined valuation approach applying multiple valuation
measure.
• Medium to long term vision, resulting in low portfolio
turnover.
How to invest?
• Minimum Investment : 10 Lacs
• Lock in : 6 months
• Reporting: Access to website showing clients holding .Monthly
reporting of portfolio holding /transaction.
• Charges: 2.5% pa AMC (Annual Maintenances Charges) fees
charged every quarter ,0.5% brokerage ,20% profit sharing after
15% hurdle is crossed chargeable at the end of fiscal year.
• Pro Arbitrage
Product Approach
An opportunity lies in basis which is the difference between cash and
future. Whenever basis is high we buy the stocks and sell the future to
lock in difference .The difference is bound to be zero at expiry.
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Product Offered
Cash –future arbitrage:
The product intends to spot low risk opportunities which will yield more
than the normal low risk product .Whenever such opportunity is spotted
stocks will be bought and to lock in the basis, future will be sold .This
position will be liquated in the expiry or before that if the basis vanishes
early .Similarly the scheme will move on from opportunity to
opportunity.
Product CharacteristicsLow –Risk: This is relatively low risk product which can be compared
with liquid funds issued by mutual funds.
High return: Compared with other low risk products, this products
offers an indicative post tax return of 8 to 10% plus.
Product Details
• Minimum Investment:Rs.1 Crore
• Lock in :6 months
• Reporting: Fortnightly for portfolio Net worth, Monthly reporting
pf portfolio Holding /transaction.
• Charges: 0.035% brokerage for future ,0.07% for delivery
• Pro Tech
Protech using the knowledge of technique analysis and the power of
depravities markets to identify trading opportunities in the market .The
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protech line of the product is designed around various risk /reward
/volatility profiles for the different kind of investment needs.
Product Approach
Better performance is possible from superior market timing and from
picking stocks before inflation points in their trading cycles .Linear
return are possible from having hedged/ sell market positions in
downtrends .Absolute return are targeted by focusing on finding trading
opportunities & not out performance of an index.
Product offered1. Nifty Thirty :
Nifty futures will be bought and sold on the basis of an automated
trading system generated calls to go long/short. The exposure will
never exceed the value of portfolio i.e. no leveraging; but allows us
to be short /hedged in Nifty in falling market therefore allowing
the client to earn irrespective of the market direction.
2. Beta Portfolio :
Positional trading opportunities are identified in the future segment
based on technical analysis .Inflection points in the momentum
cycles are identified to go long /short on stock/index futures with
1-2 months time horizon .The idea is to generate the best possible
return in the medium term irrespective of the direction of the
market without really leveraging beyond the portfolio value. Risk
protection is done based on stop losses on daily closing prices.
3. Star Nifty:
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Swing trading technique and Dow theory is used to identify short –
term reversal levels for Nifty futures and ride with trend both on
the long and short side .This return can be earned in bull and bear
market .Stop and reverse means to reverse ones position from long
to short or vice a versa at the reversal levels simultaneously .The
exposure never exceeds value of portfolio i.e. there is no
leveraging.
4. Trailing Stops.
Momentum trading techniques are used to spot short –termmomentum of 5-10 days in stocks and stocks /index futures
.Trailing stop loss method of risk management or profit protection
is used to lower the portfolio volatility and maximize return
.Trading opportunities are exposed both on the long side and the
short side as the market demands to get the best of both upward
and downward trends.
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Product Characteristics
• Using swing based index –trading systems stop and reverse .trend
following and momentum trading technique.
• Nifty based products for low impact cost and low product
volatility
• Both long and short strategies to earn returns even in falling
market.
• Trading in future market to allow for active risk protection using
trailing stop losses.
How to invest?
• Minimum : Rs.10 Lacs
• Lock in : 6 months
• Reporting: Fortnightly reporting of portfolio Net Worth,
monthly reporting of portfolio Holding /Transaction.
Charges: 0% AMC (Annual Maintenance Charges), 0.05% brokerage for derivatives, 20% profit sharing on booked profit quarterly basis.
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RESEARCH METHODOLOGY
SIGNIFICANCE
The main significance of the project is to understand the factorsinfluencing the decision to invest in a company. Since, Indian stock
market have been doing so well for the last many years, still majority of
people make their investment in either traditional investment avenues or
in schemes where there money is secure and in return what they get is a
return just a couple of percentage over the rate of inflation. The main idea
behind working on the project was to find out the main factors that play
very vital role when a person is thinking about making investment is
stocks. I took 23 variables into consideration before preparing a
questionnaire for survey.
There were some open and some close ended types of questions. As for
as secondary data related to project is concerned, it was collected from
various sources. Most part of it was collected from Net, Books, Newspapers, Magazines etc.
MANAGERIAL USEFULNESS OF THE STUDY
This project is very useful to analyze customer satisfaction with respect
to the company they are investing into. The marketing department can
use this study to enhance their marketing strategies for better sales. This
report helps marketing department in taking decision to what change in
distribution channels and what should be done so that marketing problem
could be shorted out and how to sell their range of product in the
competitive market.
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The very essence of every project related to marketing is providing a
view to management for chalk out the organization. So that they can
maintain a viable fit between the organization objective, skill and
resource and its changing market opportunities. Also give proper shape to
the company business target profit and growth. It provides a feedback to
the organization about their sales, sales schemes and what impact does it
has on the retailers and consumer. Every market research proves useful
suggestion to the organization. Marketing research helps the firm in
every component of the total marketing task. It helps the firm in every
component of the total marketing task. It helps the firm acquire a better understanding of the buyer, the competition and marketing environment.
It also aids the formulation of the marketing mix, product, and
distribution and pricing needs marketing research supports.
It also helps in taking the information of competitor’s strategies and their
impact on the buyer. The study revels may fact that have come up during
the project and these facts can either be used as opportunities in exploring
and expending the business as well as can be used and safeguard against
threats by the competitors to prepare an effecting marketing strategies.
Every market research proves usefulness to the organization. Marketing
research helps the firm in every component of the total marketing task.
Its helps the firm acquire a better understanding of the consumer, the
competition and the marketing environment.
It also aids he formulation of marketing mix, decision on each element of
marketing mix, product, distribution and promotion and pricing etc need
the support of marketing research.
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OBJECTIVES OF THE STUDY
• To know the concept of Portfolio Management Services.
•
To know about the awareness in public towards stock brokers andshare market.
• To study about the competitive position of Reliance Commercial
Finance Ltd in Competitive Market.
• To study about the effectiveness & efficiency of Reliance
Commercial Finance Ltd in relation to its competitors
SCOPE OF THE STUDY
These are some of the following scope of the study:-
In today's complex financial environment, investors have unique
needs which are derived from their risk appetite and financial
goals. But regardless of this, every investor seeks to maximize his
returns on investments without capital erosion. Portfolio
Management Services (PMS) recognize this, and manage the
investments professionally to achieve specific investment
objectives, and not to forget, relieving the investors from the day to
day hassles which investment require.
To look out for new prospective customers who are willing to
invest in PMS.
To find out the Reliance Commercial Finance Ltd, PMS services
effectiveness in the current situation.
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METHODOLOGY
The methodology section is the blue print for researcher activity and
specifies bow the investigator intents to study the people or describe
social settings. In other words the methodology section make explicit the
study desire and constitutes the “how to do it” phase.
The project study has been conducted by collecting primary data only
using structured questionnaire. No secondary data is used.
I have put my best possible effort to do this research and collect thenecessary information to learn about this topic thoroughly.
RESEARCH DESISGN OF THE STUDY
This report is based on primary as well secondary data, however primary
data collection was given more importance since it is overhearing factor
in attitude studies. One of the most important users of research
methodology is that it helps in identifying the problem, collecting,
analyzing the required information data and providing an alternative
solution to the problem .It also helps in collecting the vital information
that is required by the top management to assist them for the better
decision making both day to day decision and critical ones.
The study consists of analysis about Investors Perception about the
Portfolio Management Services offered by Reliance Commercial Finance
Ltd. For the purpose of the study 100 customers were picked up at
random and their views solicited on different parameters.
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The methodology adopted includes
Questionnaire
Random sample survey of customers
Discussions with the concerned
SOURCES OF DATA
Primary data: Questionnaire
Secondary data: Published materials of Reliance Commercial
Finance Ltd. Such as periodicals, journals, news papers, and
website.
SAMPLING PLAN
Sampling:
Since Reliance Commercial Finance Ltd has many segments I selected
Portfolio Management Services (PMS) segment as per my profile to do
market research. 100% coverage was difficult within the limited period
of time. Hence sampling survey method was adopted for the purpose of
the study.
Population:
(Universe) customers & non consumers of Reliance Commercial
Finance Ltd
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Sampling size:
A sample of five hundred was chosen for the purpose of the study.
Sample consisted of Investor as based on their Income and Profession as
well as Educational Background.
Sampling Methods:
Probability sampling requires complete knowledge about all sampling
units in the universe. Due to time constraint non-probability sampling
was chosen for the study.
Sampling procedure:
From large number of customers & non consumers sample lot were
randomly picked up by me.
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INDUSTRY OVERVIEW
Overview of Industry as a Whole
Do you know that the world's foremost marketplace New York Stock
Exchange (NYSE), started its trading under a tree (now known as 68
Wall Street) over 200 years ago? Similarly, India's premier stock
exchange Bombay Stock Exchange (BSE) can also trace back its origin
to as far as 125 years when it started as a
voluntary non-profit making association.
You hear about it any time it reaches a new high
or a new low, and you also hear about it daily in
statements like 'The BSE Sensitive Index rose
5% today'. Obviously, stocks and stock markets
are important. Stocks of public limited
companies are bought and sold at a stock exchange. But what really are
stock exchanges? Known also as TV News on the stock market appears in
different media every day. he stock market or bourse, a stock exchange is
an organized marketplace for securities (like stocks, bonds, options) featured by
the centralization of supply and demand for the transaction of orders by
member brokers, for institutional and individual investors. The exchange
makes buying and selling easy. For example, you don't have to actually
go to a stock exchange, say, BSE - you can contact a broker, who does
business with the BSE, and he or she will buy or sell your stock on your
behalf.
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All stock exchanges perform similar functions with respect to the listing,
trading, and clearing of securities, differing only in their administrative
machinery for handling these functions. Most stock exchanges are
auction markets, in which prices are determined by competitive bidding.
Trading may occur on a continuous auction basis, may involve brokers
buying from and selling to dealers in certain types of stock, or it may be
conducted through specialists dealing in a particular stock.
But where did it all start? The need for stock exchanges developed out of
early trading activities in agricultural and other commodities. During the
middle Ages, traders found it easier to use credit that required supporting
documentation of drafts, notes and bills of exchange. The history of the earliest
stock exchange, the French stock exchange, may be traced back to 12th
century when transactions occurred in commercial bills of exchange.
The first stock exchange in India, Bombay Stock Exchange was established in
1875 as 'The Native Share and Stockbrokers Association' and has
evolved over the years into its present status as the premier stock
exchange in the country. It may be noted that BSE is the oldest stock
exchange in Asia, even older than the Tokyo Stock Exchange, which was
founded in 1878. The country's second stock exchange was established in
Ahmedabad in 1894, followed by the Calcutta Stock Exchange (CSE).
CSE can also trace its origin back to 19th century. From a get together
under a 'Neem Tree' way back in the 1830s, the CSE was formally
established in May 1908.
India's other major stock exchange National Stock Exchange (NSE), promoted by
leading financial institutions, was established in April 1993. Over the
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years, several stock exchanges have been established in the major cities
of India. There are now 23 recognized stock exchanges — Mumbai
(BSE, NSE and OTC), Calcutta, Delhi, Chennai, Ahmedabad, Bangalore,
Bhubhaneswar, Coimbatore, Guwahati, Hyderabad, Jaipur, Kochi,
Kanpur, Ludhiana, Mangalore, Patna, Pune, Rajkot, Vadodara, Indore
and Meerut. Today, most of the global stock exchanges have become
highly efficient, computerized organizations. Computerized networks
also made it possible to connect to each other and have fostered the
growth of an open, global securities market.
Realizing there is untapped market of investors who want to be able to
execute their own trades when it suits them, brokers have taken their
trading rooms to the Internet. Known as online brokers, they allow you to
buy and sell shares via Internet.
Online Trading is a service offered on the Internet for purchase and sale
of shares. In the real world, you place orders on your stockbroker either
verbally (personally or telephonically) or in a written form (fax). In
Online Trading, you will access a stockbroker's website through your
internet-enabled PC and place orders through the broker's internet-based
trading engine. These orders are routed to the Stock Exchange without
manual intervention and executed thereon in a matter of a few seconds.
There are 2 types of online trading service: discount brokers and full
service online broker . Discount online brokers allow you to trade via
Internet at reduced rates. Some provide quality research, other don’t. Full
service online brokerage is linked to existing brokerages. These brokers
allow their clients to place online orders with the option of talking/
chatting to brokers if advice is needed. Brokerage rates here are higher.
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5Paisa.com, ICICIDirect.com, IndiaBulls.com, sharekhan.com,
HDFCsec.com, Tatatdw.com, HMRstreet.com are some of the online
broking sites in India.
Stock Market
With the backing of the World Bank group, many developing countries
started giving prominence to stock markets for financing enterprises and
allocation of savings. In India too, the process started in the early
‘eighties. In the wake of increased pace of economic liberalizationinitiated in 1991, the Capital Issues Control Act, 1947, which till then
regulated the issue and pricing of new capital, was done away with and
even greater emphasis was placed on the stock market. As a part of the
measures to develop the stock market and liberalization of the external
sector, foreign institutional investors were invited to trade directly on the
Indian stock exchanges. The main expectations were that the market
would help corporate raise resources directly from investors, help attract
foreign portfolio capital and facilitate the process of privatization. The
entry of foreign portfolio/institutional investors (FIIs) was expected to
broaden the base of the market and also help in the market’s development
by forcing developing country governments to follow consistent and
market friendly policies. Through their expert analysis and research, FIIs
were expected to help in better price discovery. Since 1991, a number of
measures at improving share trading and delivery mechanisms and
investor protection ranging from more periodic disclosures, takeover
regulations, insider trading rules, corporate governance code, etc. have
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been introduced by the Securities and Exchange Board of India ( SEBI),
the market regulator.
PARTIES INVOLVED IN SHARE TRADING
1. BOMBAY STOCK EXCHANGE (BSE)
Bombay Stock Exchange Limited is the oldest stock exchange in Asia
with a rich heritage. Popularly known as "BSE", it was established as
"The Native Share & Stock Brokers Association" in 1875. It is the first
stock exchange in the country to obtain permanent recognition in 1956from the Government of India under the Securities Contracts
(Regulation) Act, 1956.The Exchange's pivotal and pre-eminent role in
the development of the Indian capital market is widely recognized and its
index, SENSEX, is tracked worldwide. Earlier an Association of Persons
(AOP), the Exchange is now a demutualised and corporative entity
incorporated under the provisions of the Companies Act, 1956, pursuant
to the BSE (Corporatisation and Demutualization) Scheme, 2005 notified
by the Securities and Exchange Board of India (SEBI).
The Exchange has a nation-wide reach with a presence in 417 cities and
towns of India. The systems and processes of the Exchange are designed
to safeguard market integrity and enhance transparency in operations.
During the year 2004-2005, the trading volumes on the Exchange showed
robust growth.
The Exchange provides an efficient and transparent market for trading in
equity, debt instruments and derivatives. The BSE's On Line Trading
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System (BOLT) is a proprietary system of the Exchange and is BS 7799-
2-2002 certified. The surveillance and clearing & settlement functions of
the Exchange are ISO 9001:2000 certified.
2. NATIONAL STOCK EXCHANGE (NSE)
Capital market reforms in India have outstripped the process of
liberalization in most other sectors of the economy. However, the
creation of an independent capital market regulator was the initiation of
this reform process. After the formation of the Securities Marketregulator, the Securities and Exchange Board of India (SEBI), attention
were drawn towards the inefficiencies of the bourses and the need was
felt for better regulation, discipline and accountability. A Committee
recommended the creation of a 2nd stock exchange in Mumbai called the
"National Stock Exchange". The Committee suggested the formation of
an exchange which would provide investors across the country a single,
screen based trading platform, operated through a VSAT network.
It was on this recommendation that setting up of NSE as a technology
driven exchange was conceptualized. NSE has set up its trading system
as a nation-wide, fully automated screen based trading system. It has
written for itself the mandate to create a world-class exchange and use it
as an instrument of change for the industry as a whole through
competitive pressure. NSE was incorporated in 1992 and was given
recognition as a stock exchange in April 1993. It started operations in
June 1994, with trading on the Wholesale Debt Market Segment.
Subsequently it launched the Capital Market Segment in November 1994
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as a trading platform for equities and the Futures and Options Segment in
June 2000 for various derivative instruments.
NSE was set up with the objectives of:
(a) Establishing a nationwide trading facility for all types of securities;
(b) Ensuring equal access to investors all over the country through an
appropriate communication network;
(c) Providing a fair, efficient and transparent securities market using
electronic trading system;
(d) Enabling shorter settlement cycles and book entry settlements; and
(e) Meeting international benchmarks and standards.
NSE has been able to take the stock market to the doorsteps of the
investors. The technology has been harnessed to deliver the services to
the investors across the country at the cheapest possible cost. It provides
a nation-wide, screen-based, automated trading system, with a high
degree of transparency and equal access to investors irrespective of
geographical location. The high level of information dissemination
through on-line system has helped in integrating retail investors on a
nation-wide basis. The standards set by the exchange in terms of market
practices, products, technology and service standards have become
industry benchmarks and are being replicated by other market
participants.
Within a very short span of time, NSE has been able to achieve all the
objectives for which it was set up. It has been playing a leading role as a
change agent in transforming the Indian Capital Markets to its present
form. The Indian Capital Markets are a far cry from what they used to be
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a decade ago in terms of market practices, infrastructure, technology, risk
management, clearing and settlement and investor service.
FUTURE OUTLOOK
With increasing globalisation and consolidation amongst exchanges, the
future of the regional stock exchanges, around 22 in India, is likely to be
very uncertain and even their very survival is a question mark.
Sebi has permitted the regional exchanges to form subsidiary companies,
which are akin to super brokers. These companies have acquiredmembership of both BSE and NSE at confessional entry fees and
permitted their members to trade on the BSE and NSE thus increasing
trade volumes and business in both BSE and NSE.
The stock markets of the future will have a redefined purpose and
reinvented architecture due to the advent and widespread use of
technology. Information and stock price quotations are available almost
instantaneously and more importantly investors can act on this data by
executing a trade from anywhere at any time.
This new market will bring benefits to investors, listed companies, and
the economies of countries. Trading will be cheaper, faster and settlement
will be simpler and with reduced risk. Raising capital for companies will
be easier, thus contributing directly to economic expansion.
The leaders in this new world of investing will be the ones willing to be
agents of change, to best meet the needs of investors and companies, and
to do what is best for these two principal stakeholders in the capital
markets.
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If done right, the stock markets of the future will be even better vehicles
than today in helping companies grow, creating jobs, providing fair
investment opportunities for people, and in improving economies.
Both the exchanges, BSE and NSE, are visionary, proactive and
increasingly use leading-edge technologies to effectively compete in the
global environment. In the not-too-distant future, once full capital
account convertibility is permitted in India one could well witness an
expansion of trading volumes and its resultant economic benefits to the
thriving and ever-young metropolis of Mumbai.
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COMPANY PROFILE
RELIANCE COMMERCIAL FINANCE LTD
Reliance Commercial Finance aims to enable people fulfill all their
ambitions by creating assets for personal & business requirements.
It offers an exhaustive suite of financial solutions – Mortgages Loans,
Loans against property, Loans for Commercial Vehicles, Loans for
Construction Equipment, SME Loans, Auto Loans, business loans, Loans
against Securities and Infrastructure Financing
What’s more, with the help of our easy-to-use loan calculator, you can
decide on the tenure, interest rate and the loan amount that best suits you.
Reliance Commercial Finance has a loan book size of Rs. 13,927 crore
(US$ 2.8 billion), with a customer base of over 1,01,000 customers, as on
September 30, 2011, across the top 18 Indian metros.
Reliance Commercial Finance prides itself in creating customized
financial solutions for our partners and customers by offering great
Turnaround Time.
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RELIANCE CAPITAL
HISTORY
Reliance Capital Limited (RCL) was incorporated in year 1986 atAhmedabad in Gujarat as Reliance Capital & Finance Trust Limited. The
name RCL came into effect from January 5, 1995. In 2002, RCL shifted
its registered office to Jamnagar in Gujarat before it finally moved to
Mumbai in Maharashtra, in 2006.
In 2006, Reliance Capital Ventures Limited merged with RCL and with
this merger the shareholder base of RCL rose from 0.15 million
shareholders to 1.3 million.
RCL entered the Capital Market with a maiden public issue in 1990 and
in subsequent years further tapped the capital market through rights issue
and public issues. The equity shares were initially listed on the
Ahmedabad Stock Exchange and The Stock Exchange Mumbai.
Presently the shares are listed on The Stock Exchange Mumbai and the
National Stock Exchange of India.
RCL in the initial years engaged itself in steady annuity yielding
businesses such as leasing, bill discounting, and inter-corporate deposits.
Later, in 1993 diversified its business in the areas of portfolio investment,
lending against securities, custodial services, money market operations,
project finance advisory services, and investment banking.
RCL was accredited a Category 1 Merchant banker by the Securities
Exchange Board of India (SEBI). It had lead managed/co-managed 15
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issues of an aggregate value of Rs. 400 crore and had underwritten 33
issues for an aggregate value of Rs. 550 crore. All these companies were
listed on various exchanges.
RCL obtained its registration as a Non-banking Finance Company
(NBFC) in December 1998. In view of the regulatory requirements RCL
surrendered its Merchant Banking License.
RCL has since diversified its activities in the areas of asset management
and mutual fund; life and general insurance; consumer finance and
industrial finance; stock broking; depository services; private equity and
proprietary investments; exchanges, asset reconstruction; distribution of
financial products and other activities in financial services.
VISION
"The most profitable, innovative, and most trusted financial services
company in India and in the emerging markets".
In achieving this vision, the company will be both customer-centric and
innovation-driven.
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TOP MANAGEMENT PROFILE
Reliance Capital is anchored by a team of experienced and committed
visionaries who are dedicated towards scaling the company to greater
heights through innovation and excellence; thereby creating value for all
our stakeholders.
• Amit Bapna (Chief Financial Officer, Reliance Capital)
• Arun Hariharan (President, Quality and Knowledge Management,
Reliance Capital)
• K. Achuthan (Chief People Officer, Reliance Capital)
• K. V. Srinivasan (Chief Executive Officer, Reliance Commercial
Finance)
• Lav Chaturvedi (Chief Risk Officer, Reliance Capital)
•
Madhusudan Kela (Chief Investment Strategist, Reliance Capital)
• Malay Ghosh (Executive Director & President, Reliance Life
Insurance Company)
• Rajnikant Patel (President and Chief Executive Officer, Reliance
Spot Exchange)
•
Sam Ghosh (Chief Executive Officer, Reliance Capital)
• Sandeep Phanasgaonkar (Chief Technology Officer, Reliance
Capital)
• Sanjay Jain (Chief Marketing Officer, Reliance Capital)
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• Sundeep Sikka (Chief Executive Officer, Reliance Capital Asset
Management)
• Rakesh Jain (Chief Executive Officer, Reliance General
Insurance)
• Vikrant Gugnani (Chief Executive Officer, International Business-
Reliance Capital)
• (Executive Director, Reliance Securities Ltd)
• V. R. Mohan (President and Company Secretary )
BUSINESS OVERVIEW
Reliance capital, a constituent of cnx nifty junior and msci india, is a part
of the reliance group. It is one of india's leading and amongst most
valuable financial services companies in the private sector.
Reliance capital has interests in asset management and mutual funds; life
and general insurance; commercial finance; equities and commodities
broking; investment banking; wealth management services; distribution
of financial products; exchanges; private equity; asset reconstruction;
proprietary investments and other activities in financial services.
Reliance mutual fund is amongst top two mutual funds in india with over
seven million investor folios. Reliance life insurance and reliance generalinsurance are amongst the leading private sector insurers in india.
Reliance securities is one of india’s leading retail broking houses.
Reliance money is one of india’s leading distributors of financial
products and services.
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Reliance capital has a net worth of rs. 7,844 crore (us$ 2 billion) and total
assets of rs. 33,356 crore (us$ 7 billion) as on september 30, 2011.
BALANCE SHEET
Balance Sheet of
Reliance Capital
------------------- in Rs. Cr. -------------------
Mar '11 Mar '10 Mar '09 Mar '08 Mar '07
12 mths 12 mths 12 mths 12 mths 12 mths
Sources Of Funds
Total Share Capital 246.16 246.16 246.16 246.16 246.16Equity Share
Capital
246.16 246.16 246.16 246.16 246.16
Share Application
Money
0 0 0 0 0
Preference Share
Capital
0 0 0 0 0
Reserves 6,781.53 6,712.90 6,560.28 5,779.07 4,915.07
RevaluationReserves
0 0 0 0 0
Networth 7,027.69 6,959.06 6,806.44 6,025.23 5,161.23
Secured Loans 13,646.1
1
6,522.02 4,937.04 2,454.48 145
Unsecured Loans 4,836.91 5,436.13 8,842.49 6,871.10 1,256.36
Total Debt 18,483.0
2
11,958.1
5
13,779.5
3
9,325.58 1,401.36
Total Liabilities 25,510.7
1
18,917.2
1
20,585.9
7
15,350.8
1
6,562.59
Mar '11 Mar '10 Mar '09 Mar '08 Mar '07
12 mths 12 mths 12 mths 12 mths 12 mths
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Application Of Funds
Gross Block 157.34 211.2 351.63 336.24 298.63
Less: Accum.
Depreciation
78.32 125.69 252.69 231.61 214.52
Net Block 79.02 85.51 98.94 104.63 84.11Capital Work in
Progress
110.03 82.25 93.79 17.45 14.6
Investments 11,166.6
6
10,676.0
4
8,746.49 4,715.39 2,434.34
Inventories 0 0 0.53 0.82 0.82
Sundry Debtors 16.69 121.23 81.47 185.21 254.15
Cash and Bank
Balance
833.19 227.09 74.52 33.76 9.8
Total Current
Assets
849.88 348.32 156.52 219.79 264.77
Loans and
Advances
13,995.4
2
8,722.86 11,834.7
5
10,578.2
0
3,819.04
Fixed Deposits 337.97 165.25 0 860.15 165.15
Total CA, Loans &
Advances
15,183.2
7
9,236.43 11,991.2
7
11,658.1
4
4,248.96
Deffered Credit 0 0 0 0 0
Current Liabilities 896.3 1,028.12 213.94 917.79 110.7
Provisions 201.39 208.27 239.59 227.01 108.72
Total CL &
Provisions
1,097.69 1,236.39 453.53 1,144.80 219.42
Net Current Assets 14,085.5
8
8,000.04 11,537.7
4
10,513.3
4
4,029.54
Miscellaneous
Expenses
69.42 73.37 109.01 0 0
Total Assets 25,510.7
1
18,917.2
1
20,585.9
7
15,350.8
1
6,562.59
Contingent 1,225.77 274.06 389.61 38.55 66.46
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Liabilities
Book Value (Rs) 286.11 283.31 277.1 245.29 210.12
PROFIT AND LOSS ACCOUNT
Profit & Loss account
of Reliance Capital
------------------- in Rs. Cr.
-------------------
Mar '11 Mar '10 Mar '09 Mar '08 Mar '07
12 mths 12 mths 12 mths 12 mths 12 mths
Income
Sales Turnover 1,840.3
9
2,366.6
2
2,939.8
8
2,066.9
9
873.57
Excise Duty 0 0 0 0 0
Net Sales 1,840.3
9
2,366.6
2
2,939.8
8
2,066.9
9
873.57
Other Income 46.36 3.78 -9.39 -70.08 8.64
Stock Adjustments 0.00 0.00 0.00 0.00 0.00
Total Income 1,886.7
5
2,370.4
0
2,930.4
9
1,996.9
1
882.21
Expenditure
Raw Materials 0.00 0.00 0.00 0.00 0
Power & Fuel Cost 0.00 0.00 0.00 0.00 0.00
Employee Cost 109.47 121.64 149.08 157.86 45.30
Other Manufacturing
Expenses
0.00 0.00 0.00 0.00 0.00
Selling and Admin
Expenses
291.32 470.33 356.49 135.22 22.23
Miscellaneous
Expenses
37.22 56.6 89.77 106.68 30.25
Preoperative Exp
Capitalised
0 0 0 0 0
Total Expenses 438.01 648.57 595.34 399.76 97.78
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Mar '11 Mar '10 Mar '09 Mar '08 Mar '07
12 mths 12 mths 12 mths 12 mths 12 mths
Operating Profit 1,402.38
1,718.05
2,344.54
1,667.23
775.79
PBDIT 1,448.7
4
1,721.8
3
2,335.1
5
1,597.1
5
784.43
Interest 1,263.0
2
1,290.9
2
1,237.8
4
408.61 42.63
PBDT 185.72 430.91 1,097.3
1
1,188.5
4
741.8
Depreciation 14.33 18.16 21.22 17.09 7.07
Other Written Off 0 0 0 0 0
Profit Before Tax 171.39 412.75 1,076.0
9
1,171.4
5
734.73
Extra-ordinary items 25.23 15.58 0.93 -3.41 20.38
PBT (Post Extra-ord
Items)
196.62 428.33 1,077.0
2
1,168.0
4
755.11
Tax -33.23 88.91 109 146 87
Reported Net Profit 229.27 339.42 968.02 1,025.4
5
646.18
Total Value Addition 438.01 648.57 595.34 399.76 97.78
Preference Dividend 0.00 0.00 0 0.00 0
Equity Dividend 159.66 159.66 159.66 135.10 85.97
Corporate Dividend
Tax
1.57 27.14 27.14 22.94 14.61
Per share data (annualised)
Shares in issue (lakhs) 2,456.33
2,456.33
2,456.33
2,456.33
2,456.33
Earning Per Share (Rs) 9.33 13.82 39.41 41.75 26.31
Equity Dividend (%) 65 65 65 55 35
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BUSINESS MIX OF RELIANCE CAPITAL
Asset Management Mutual Fund, Offshore Fund, Pension Fund, Portfolio
Management
Insurance Life Insurance, General Insurance
Broking And
Distribution
Equities, Commodities And Derivatives, Wealth
Management Services, Portfolio Management Services,
Investment Banking, Foreign Exchange And Offshore
Investment, Third Party Products
Commercial Finance Mortgages, Loans Against Property , Sme Loans,
Loans For Commercial Vehicles, Loans For
Construction Equipment, Auto Loans, Business Loans,
Loans Against Securities, Infrastructure Financing
Other Businesses Exchanges, Private Equity, Institutional Broking, Asset
Reconstruction, Venture Capital
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COMPETITORS INFORMATION
ICICIDIRECT.COM
Products and Services
A product for every need: ICICIdirect.com is the most
comprehensive website, which allows you to invest in Shares,
Mutual funds, Derivatives (Futures and Options) and other
financial products. Simply put we offer you a product for every
investment need of yours.
ICICI Web Trade Limited (IWTL) maintains ICICIdirect.com. IWTL is
an Affiliate of ICICI Bank Limited and the Website is owned by ICICI
Bank Limited
Product & Services:
1. Trading in shares: ICICIdirect.com offers you various options while
trading in shares.
Cash Trading: This is a delivery based trading system, which is
generally done with the intention of taking delivery of shares or monies.
Margin Trading: You can also do an intra-settlement trading upto 3 to
4 times your available funds, wherein you take long buy/ short sell
positions in stocks with the intention of squaring off the position within
the same day settlement cycle. (ONLY for intraday)
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MarginPLUS Trading: Through Margin PLUS you can do an intra-
settlement trading upto 25 times your available funds, wherein you take
long buy/ short sell positions in stocks with the intention of squaring off
the position within the same day settlement cycle. Margin PLUS will
give a much higher leverage in your account against your limits.
Spot Trading: When you are looking at an immediate liquidity option,
'Cash on Spot' may work the best for you, On selling shares through
"cash on spot", money is credited to your bank a/c the same evening &
not on the exchange payout date. This money can then be withdrawn
from any of the ICICI Bank ATMs.
BTST : Buy Today Sell Tomorrow (BTST) is a facility that allows you
to sell shares even on 1st and 2nd day after the buy order date, without you
having to wait for the receipt of shares into your demat account.
CallNTrade®: CallNTrade® allows you to call on a local number in
your city & trade on the telephone through our Customer Service
Executives. This facility is currently available in over 11 major states
across India.
Trading on NSE/BSE: Through ICICIdirect.com, you can trade on NSE
as well as BSE
2. TRADE IN DERIVATIVES:
FUTURES
Through ICICIdirect.com, you can now trade in index and stock futures
on the NSE. In futures trading, you take buy/sell positions in index or
stock(s) contracts having a longer contract period of up to 3 months.
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Presently only selected stocks, which meet the criteria on liquidity and
volume, have been enabled for futures trading.
Calculate Index and Know your Margin are tools to help you in
calculating your margin requirements and also the index & stock price
movements..
OPTIONS
To take the buy/sell position on index/stock options, you have to place
certain % of order value as margin. With options trading, you can
leverage on your trading limit by taking buy/sell positions much more
than what you could have taken in cash segment.
3. Mutual Funds:
4. IPOs and Bonds Online:
You could also invest in Initial Public Offers (IPOs) and Bonds online
without going through the hassles of filling ANY application form/ paperwork.
Get in-depth analyses of new IPOs issues (Initial Public Offerings),
which are about to hit the market and analysis on these. IPO calendar,
recent IPO listings, prospectus/offer documents, and IPO analysis are few
of the features, which help you, keep on top of the IPO markets.
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INDIA BULLS
Indiabulls Group is one of the top business houses in the country with
business interests in Real Estate, Infrastructure, Financial Services,
Retail, Multiplex and Power sectors. Indiabulls Group companies are
listed in Indian and overseas markets and have a market capitalization of
over USD 7 billion. The Networth of the Group exceeds USD 2.5 billion.
Indiabulls Group companies enjoy highest ratings from CRISIL, a
subsidiary of Standard and Poor’s. Indiabulls has been conferred the
status of a “Business Superbrand” by The Brand Council, Superbrands
India.
Indiabulls Financial Services is an integrated financial services
powerhouse providing Consumer Finance, Housing Finance, Commercial
Loans, Life Insurance, Asset Management and Advisory services.
Indiabulls Financial Services Ltd is amongst 68 companies constituting
MSCI - Morgan Stanley India Index. Indiabulls Financial is also part of
CLSA’s model portfolio of 30 Best Companies in Asia. Indiabulls
Financial Services signed a joint venture agreement with Sogecap, the
insurance arm of Societé Generale (SocGen) for its upcoming life
insurance venture. Indiabulls Financial Services in partnership with
MMTC Limited, the largest commodity trading company in India, is
setting up India’s 4th Multi-Commodities Exchange.
Indiabulls Real Estate Limited is India’s third largest property company
with development projects spread across residential projects, commercial
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offices, hotels, malls, and Special Economic Zones (SEZs) infrastructure
development. Indiabulls Real Estate partnered with Farallon Capital
Management LLC of USA to bring the first FDI into real estate.
Indiabulls Real Estate is transforming 14 million sqft in 16 cities into
premium quality, high-end commercial, residential and retail spaces.
Indiabulls Real Estate has diversified significantly in the following three
business verticals within the real estate space: Real Estate Development,
Project Advisory & Facilities Management: Residential, Commercial
(Office and Malls) and SEZ Development. Power: Thermal and Hydro
Power Generation. Retail: Departmental Stores, Hypermarket Stores,Daily Needs Neighborhood Stores.
Indiabulls Securities Limited is India’s leading capital markets company
with All-India Presence and an extensive client base. Indiabulls
Securities possesses state of the art trading platform, best broking
practices and is the pioneer in trading product innovations. Power
Indiabulls, in-house trading platform, is one of the fastest and mostefficient trading platforms in the country. Indiabulls Securities Limited is
the first and only brokerage house to be assigned the highest rating BQ –
1 by CRISIL.
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ABHIPRA
Beginning as a Broking House, we grew into Business House. We
broadened our horizons and stepped into the field of Depository, Stock
Broking, Full-Fledged Money Changing Services, Category I Registrar &
Transfer Agent, Commodity Trading, Online Trading (Equity, F&O &
Commodity), e-Return Intermediary. Abhipra today commands the
status of being one of the leading Depository Participant of Northern
India in Private Sector. Moreover, Abhipra has Trading Terminal
Outlets for NSE & BSE spread to almost every nook & corner of
Northern India.
Abhipra Capital Limited is also empanelled as a Depository Participant
with one of the premier Commodity bourse, National Commodities and
Derivatives Exchange Limited (NCDEX). So a client now can open
Commodity Demat Account with us
At Abhipra, we offer our clients far more than merely a comprehensive
range of financial services. We offer them ideas, innovations, and
solutions with extra-ordinary results. We feel that quality is an essential
ingredient in building successful businesses. Not only do products and
services need to be of high quality, but potential customers also need to
have assurance that the products will be of high quality. This is
evidenced from the fact that Abhipra is a ISO 9001 (Quality Assurance
Systems) Registered Company.
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Abhipra group has been promoted and governed by the high
entrepreneurial and charismatic endeavors of its Chairman Mr. V.D.
Aggarwal, Chartered Accountant, with a standing of 27 years. His
acumen backed by his foresight and vision has made Abhipra as one of
the leading groups among the competitors in the Capital Market. Mr.
V.D. Aggarwal enjoys the honor of being The President of Depository
Participants Association of India (DPAI) and also President of Chamber
of Chartered Accountants of India (CCA). He is also former President of
Association NSE Members of India.
Abhipra is a progressive, computerized and professionally managed
organization which takes pride in offering value-added services to its
clients. Abhipra's range of professional financial services cover
Depository Services (NSDL, CDS)
Futures & Options
Capital MarketTrading (NSE, BSE)
Commodity Trading (NMCE, NCDEX,MCX)
FOREX (RBI Approved)
Tours & Travels
SEBI Approved R & T (Cat - I)
Investment Arranger
e-Return Intermediary
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KOTAK SECURITIES
Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the
stock broking and distribution arm of the Kotak Mahindra Group. Kotak
Mahindra is one of India's leading financial institutions, offering
complete financial solutions that encompass every sphere of life. From
commercial banking, to stock broking, to mutual funds, to life insurance,
to investment banking, the group caters to the financial needs of
individuals and corporate.
Kotak Securities was set up in 1994. Kotak Securities is a corporate
member of both The Bombay Stock Exchange and the National Stock
Exchange of India Limited.
The company has four main areas of business:
• Institutional Equities,
• Retail (equities and other financial products),
• Portfolio Management and
• Depository Services.
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MOTILAL OSWAL
Motilal Oswal Securities Ltd. was founded in 1987 as a small sub-
broking unit, with just two people running the show. It has established
itself as the Best Local Brokerage House in India (Asia Money Brokers’
Poll 2005). Their Institutional Equity Division combines the efforts of the
Research and Sales & Trading departments to best serve clients' needs.
Consistent delivery of high quality advice on individual stocks, sector
trends and investment strategy has established them as a reliable research
unit amongst leading Indian as well as international investors.
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PRIMARY FINDINGS AND ANALYSIS
1. Do you know about the Investment Option available?
Interpretation
As the above table shows the knowledge of Investor out of 100
respondent carried throughout the Delhi Area is only 85%. The
remaining 15% take his/her residential property as an investment.
According to law purpose this is not an investment because of it is not
create any profit for the owner. The main problem is that in this time
from year 2008-2009 , the recession and the Inflation make the investor
think before investing a even a Rs. 100.So , it also create the problem for
the Investor to not take interest in Investment option.
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2. What is the basic purpose of your Investments?
Interpretation
As with the above analysis, it is found 75% people are interested in
liquidity, returns and tax benefits. And remaining 25% are interested in
capital appreciations, risk covering, and others. In the entire respondent it
is common that this time everyone is looking for minimizing the risk and
maximizing their profit with the short time of period.
As explaining them About the Portfolio Management Services of
Reliance Commercial Finance Ltd, they were quite interested in Protech
Services.
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3. What is the most important factor you consider at the time of
Investment?
Interpretation
As the above analysis gives the clear idea that most of the Investors
considered the market factor as around 12% for Risk and 23% Return,
but most important common things in all are that they are even ready for
taking both Risk and Return in around 65% investor.
Moreover, the Market is fluctuating now days, so as it also getting
improvement. So, Investor are looking for Investment in long term and
Short-term.
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4. From which option you will get the best returns?
Interpretation
Most of the respondents say they will get more returns in Share Market.
Since Share Market is said to be the best place to invest to get more
returns. The risk in the investment is also high.
Similarly, the Investor are more Interested in Investing their money in
Mutual Fund Schemes as that is also very important financial product
due to its nature of minimizing risk and maximizing the profit. As the
commodities market is doing well from last few months so Investor also
prefer to invest their money in Commodities Market basically in GOLD
nowadays.
Moreover, even who don’t want to take Risk they are looking for
investing in Fixed Deposit for long period of time.
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5. “Investing in PMS is far safer than Investing in Mutual Fund”.
Do you agree?
Interpretation
In the above graphs it’s clear that 24% of respondent out of hundred feel
that investing their money in Mutual Fund Scheme are far safer thanInvesting in PMS. this is because of lack of proper information about the
Portfolio management services. As the basis is same for the mutual fund
and PMS but the investment pattern is totally different from each other
and which depends upon different risk factor available in both the
Financial Products.
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6. How much you carry the expectation in Rise of your Income
from Investments?
Interpretation
The optimism is shown in the attitude of the respondents. The confidence
was appreciable with which they are looking forward to a rise in their
investments. Major part of the sample feels that the rise would be of
around 15%. Only 8% of the respondents were confident enough to
expect a rise of upto 35%.
As all the respondents were considering the Risk factor also before filling
the questionnaire and they were asking about the performance report of
all the PMS services offered by Reliance Commercial Finance Ltd.
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7. If you invested in Share Market, what has been your
experience?
Interpretation
20% of the respondents have invested in Share market and received
satisfactory returns, 40% of the respondents have not at all invested in
Share Market. Some of the investors face problems due to less
knowledge about the market. Some of the respondents don’t have
complete overview of the happenings and invest their money in wrong
shares which result in Loss. This is the reason most of the respondents
prefer Portfolio Management Services to trade now a days, which gives
the Investor the clear idea when is the right time to buy and right time to
sell the shares which is recommended by their Fund Manger.
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8. How do you trade in Share Market?
Interpretation
As we know that Share market is totally based on psychological
parameters of Investors, which changed as per the market condition, but
at the same time the around 45% investor trade on the basis of
speculation and 31% depend upon Investment option Bonds, Mutual
Funds etc.
Moreover, the now a day’s Hedging is most common derivatives tools
which is used by the Investor to get more return from the Market ,this is
mostly used in the Commodities Market.
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9. How do you manage your Portfolio?
Interpretation
About 57% of the respondents say they themselves manage their
portfolio and 43% of the respondents say they depends on the security
company for portfolio Management. 43% of the respondents prefer PMS
of the company because they don’t have to keep a close eye on their
investment; they get all the information time to time from their Fund
Manager.
Moreover, talking about the Reliance Commercial Finance Ltd services
they are far satisfied with the Protech and Prop rime Performance during
last year. They are satisfied with the quick and active services of
Reliance Commercial Finance Ltd customer services where, they get the
updated knowledge about the scrip detail everyday from their Fund
Manager.
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10. If you trade with Reliance Commercial Finance Ltd then why?
Interpretation
As the above research shows the reasons and the parameters on which
investor lie on Reliance Commercial Finance Ltd and they do the trade.
Among hundred respondents 35% respondents do the trade with the
company due to its research Report, 28% based on Brokerage Rate
whereas 22 % are happy with its Services.
Last but not the least, 15% respondents are depends upon the tips of
Reliance Commercial Finance Ltd which gives them idea where to invest
and when to invest.
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At the time of research what I found is that still Reliance Commercial
Finance Ltd need to make the clients more knowledge about their PMS
product.
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11. Are you using Portfolio Management services (PMS) of
Reliance Commercial Finance Ltd?
Interpretation
As talking about the Investment option, in most of clients it was common
that they know about the Option but as the PMS of Reliance Commercial
Finance Ltd have different Product offering, Product Characteristics and
the Investment amount is also different this makes the clients to think
differently.
It is found that 56% of Reliance Commercial Finance Ltd client where
using PMS services as for their Investment Option.
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12. Which Portfolio Type you preferred?
Interpretation
The above analysis shows, in which portfolio the investor like to deal
more in PMS.
As 45% investor likes to go for Equity Portfolio and 28% with Balanced
Portfolio, whereas around 27% investor like to, go for Debt Portfolio.
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13. How was your experience about Portfolio Management
services (PMS) of Reliance Commercial Finance Ltd Limited?
Interpretation
In the above analysis it is clear that the Investor have the good and the
bad experience both with the SCM PMS services.
In this current scenario 52% of the Investor earned, whereas around 18%
have to suffer losses in the market. Similarly 30% of the Respondents are
there in Breakeven Point (BEP), where no loss and no profit.
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14. Does Reliance Commercial Finance Ltd Limited keep it PMS
process Transparent?
Interpretation
The above analysis is talking about the Reliance Commercial Finance Ltd
Transparency of their PMS services. In hundred respondents 63% said
that they get all the information about their scrip buying and selling
information day by day, where as 37% of respondents are not satisfied
with the PMS information and Transparency because they don’t get any
type of extra services in PMS as they were saying.
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15. Do you recommend Reliance Commercial Finance Ltd PMS to
others?
Interpretation
The above analysis shows the Investor perception toward the Reliance
Commercial Finance Ltd PMS as on the basis of their good and bad
experience with Reliance Commercial Finance Ltd limited. Among
hundred respondents 86% respondents were agree to recommend the
PMS of Reliance Commercial Finance Ltd to their peers, relatives etc.
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AN ASSESSMENT OF THE INTERNSHIP
1. What skills and qualifications you think that you have gained
from the internship?
I gained skills in project management, dealing with ambiguity, and
adapting to different philosophies.
2. What kind of responsibilities you have undertaken during the
internship period?
In external consulting organizations I spend the majority of their time
analyzing data, conducting validation studies, writing reports, developing
training courses and/or selection assessments, and directing client contact
(e.g., conduct focus groups) while in internal consulting organizations
conduct job analyses, analyze data, manage projects, collect data, write
reports, and develop selection assessments. While there is some overlap
in the most frequent tasks, the differences are notable.
3. How do you think the internship will influence your future
career plans?
Internships are more than a learning experience – they help emerging
talent look into the future.
I can find an internship that fits their schedule – class, life and work.
From the very short-term to year-round, full-time positions, internships
are a great way to learn about different industries and roles, and augment
your income through compensation.
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4. How do you think the internship activities that you carried out
are correlated with your classroom knowledge?
I have been taught almost the similar things that what we have listens in
our classroom. So, the knowledge is everywhere, you just have to grab it.
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FINDINGS & RECOMMENDATIONS
FINDINGS
• About 85% Respondents knows about the Investment Option,
because remaining 15% take his /her residential property as
Investment, but in actual it not an investment philosophy carries
that all the Investment does not create any profit for the owner.
• More than 75% Investors are investing their money for Liquidity,
Return and Tax benefits.
• At the time of Investment the Investors basically considered the
both Risk and Return in more %age around 65%.
• As among all Investment Option for Investor the most important
area to get more return is share around 22%after that Mutual Fund
and other comes into existence.
• More than 76% of Investors feels that PMS is less risky than
investing money in Mutual Funds.
• As expected return from the Market more than 48% respondents
expect the rise in Income more than 15%, 32% respondents are
expecting between 15-25% return.
• As the experience from the Market more than 34% Investor had
lose their money during the concerned year, whereas 20%
respondents have got satisfied return.
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• About 45% respondents do the Trade in the Market with
Derivatives Tools Speculation compare to 24% through
Hedging .And the rest 31% trade their money in Investments.
• Around 57% residents manage their Portfolio through the different
company whereas 43%Investor manage their portfolio themselves.
• The most important reasons for doing trade with Reliance
Commercial Finance Ltd is RELIANCE COMMERCIAL
FINANCE LTD Research Department than its Brokerage rateStructure.
• Out of hundred respondents 56% respondents are using Reliance
Commercial Finance Ltd PMS services.
• Investors preferred more than 45% equity Portfolio, 28%Balanceed
Portfolio and about 27% Debt Portfolio with Reliance Commercial
Finance Ltd PMS.
• About 52% Respondents earned through Reliance Commercial
Finance Ltd PMS product, whereas 18% investor faced loses also.
• More than 63% Investor are happy with the Transparency system
of Reliance Commercial Finance Ltd.
• As based on the good and bad experience with Reliance
Commercial Finance Ltd around 86% are ready to recommended
the PMS of RELIANCE COMMERCIAL FINANCE LTD to their
peers, relatives etc.
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RECOMMENDATIONS
• The company should also organize seminars and similar activities
to enhance the knowledge of prospective and existing customers,so that they feel more comfortable while investing in the stock
market.
• Investors must feel safe about their money invested.
• Investor’s accounts must be more transparent as compared to other
companies.
• Reliance Commercial Finance Ltd must try to promote more its
Portfolio Management Services through Advertisements.
• Reliance Commercial Finance Ltd needs to improve more it’s
Customer Services
• There is need to change in lock in period in all three PMS
i.e.Protech, Proprime, Pro Arbitrage.
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CONCLUSION
On the basis of the study it is found that Reliance Commercial Finance
Ltd is better services provider than the other stockbrokers because of
their timely research and personalized advice on what stocks to buy and
sell. Reliance Commercial Finance Ltd provides the facility of Trade
tiger as well as relationship manager facility for encouragement and
protects the interest of the investors. It also provides the information
through the internet and mobile alerts that what IPO’s are coming in the
market and it also provides its research on the future prospect of the IPO.
We can conclude the following with above analysis.
• Reliance Commercial Finance Ltd has better Portfolio
Management services than Other Companies
• It keeps its process more transparent.
• It gives more returns to its investors.
•
It charges are less than other portfolio Management Services• It provides daily updates about the stocks information.
• Investors are looking for those investment options where they get
maximum returns with less returns.
• Market is becoming complex & it means that the individual
investor will not have the time to play stock game on his own.
People are not so much ware aware about the Investment option available
in the Market.
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ANNEXURE
QUESTIONNAIRE
NAME: AGE:
OCCUPATION: PHONE NO:
1. Do you know about the Investments Option available?
a. YES
b. NO
2. What is the basic purpose of your Investments?
a. Liquidity
b. Return
c. Tax Benefits
d. Risk Covering
e. Capital Appreciation
f. Others
3. What is the most important factor you consider at the time of
Investment?
a. Risk
b. Return
c. Both
4. From which option you will get the best returns?
a. Mutual Funds
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b. Shares
c. Commodities Market
d. Bonds
e. Fixed Deposits
f. Property
g. Others
5. “Investing in PMS is far safer than Investing in Mutual Fund”.
Do you agree?
a. Yes
b. No
6. How much you carry the expectation in Rise of your Income
from Investments?
a. Upto 15%
b. 15-25%
c. 25-35%
d. More than 35%
7. If you invested in Share Market, what has been your
experience?
a. Satisfactory Return
b. Burned Finger
c. Unsatisfactory Results
d. No
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8. How do you trade in Share Market?
a. Hedging
b. Speculation
c. Investment
9. How do you manage your Portfolio?
a. Self
b. Depends on the company for portfolio
10. If, you trade with Reliance Commercial Finance Ltd then why?
a. Research
b. Brokerage
c. Services
d. Investments Tips
11. Are you using Portfolio Management services (PMS) of
Reliance Commercial Finance Ltd?
a. Yes
b. No
12.Which Portfolio Type you preferred?
a. Equity
b. Debt
c. Balanced
13. How was your experience about Portfolio Management
services (PMS) of Reliance Commercial Finance Ltd?
a. Earned
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b. Faced Loss
c. No profit No loss
14. Does Reliance Commercial Finance Ltd keep it PMS process
Transparent?
a. Yes
b. No
15. Do you recommend Reliance Commercial Finance Ltd to
others?
a. Yes b. No
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BIBLIOGRAPHY
BOOKS/MAGAZINES REFFERED:
BOOKS
Financial Management - Jae K. Shim , Joel G. Siegel
• Fundamentals of financial management - Eugene F.
Brigham, Joel F. Houston
MAGAZINE: -
• Business World
WEBSITES:-
• www.google.com
• www.moneycontrol.com
• www.karvy.com
• www.yahoofinance.com
• www.nseindia.com
• www.bseindia.com
• www.RelianceCommercialFinance Ltd.com
• www.5paisa.com
• www.hdfc.com
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