SIP Report on Motilal Oswal Final-2[1]

PROJECT REPORTOn

“INVESTOR BEHAVIOR ANALYSIS”

At

MOTILAL OSWAL SECURITIES LIMITED

Submitted in partial fulfillment of the requirement for

Master of Management Studies (MMS)

Name of the Faculty guide Name of the Company Guide

Prof. Aradhana Tiwari Mr. Parag Nagda

By:

Name of Student: Jeevan Yadav Day and Date:

Roll No.: 95, Div.: B

Batch of 2010-12

STERLING INSTIUTE OF MANAGEMENT STUDIES

AFFILIATED TO UNIVERSITY OF MUMBAI Plot No.93/93A, Sector 19, Near Seawoods Railway Station, Nerul (East), Navi Mumbai

Navi Mumbai, Maharashtra 400706

NCRD’s Sterling Institute of Management StudiesPage 1

COMPANY CERTIFICATE


COLLEGE CERTIFICATE

This is to certify that Jeevan Yadav a student of MMS- II from NCRD’s Sterling Institute of

Management Studies has done his semester project at Motilal Oswal Securities Limited from

1st May to 30th June under my guidance.

The project work entitled “INVESTOR BEHAVIOR ANALYSIS” embodies the original work

done by Jeevan Yadav during his above full semester project training period.

Date:

Prof. Aradhana Tiwari Authorized Signatory

(Finance Lecturer)

Dr. Anjan Maiti

(Director )


CERTIFICATE OF ORIGIONALITY

I, Jeevan Yadav, Roll No. 95 of 2010-12, a full time bonafide student of Second year of Master

of Management Studies (MMS) Programme of Sterling Institute of Management Studies, Nerul,

Navi Mumbai, affiliated to University of Mumbai. I hereby certify that this project work carried

out by me, at Motilal Oswal Securites Limited the report submitted in partial fulfillment of the

requirements of the programme is an original work of mine under the guidance of the industry

mentor Mr Parag Nagda and faculty mentor Prof. Aradhana Tiwari and is not based or

reproduced from any existing work of any other person or on any earlier work undertaken at any

time or for any other purpose, and has not been submitted anywhere else at any time.

(Prof. Aradhana Tiwari) (Jeevan Yadav)

Date: September, 2011 Date: September 2011


ACKNOWLEDGEMENT

“For Any Successful Work, It Owes Many Thanks”

This is the moment, which gives me opportunity to thanks everyone who has contributed in my practical training at Motilal Oswal Securities Ltd as part of my study.

First of all I would like to express my gratitude to the management of NCRD’s Sterling Institute of Management Studies , Dr. Anjan Maiti and Dr. R.K. Srivastava for giving an opportunity and boosting moral during the training period.I would like to express my sincere thanks to Prof. Aradhana Tiwari (Faculty guide) and Prof. Rakhi Srivastava (HOD Finance Department) for helping me in various aspects the study.

I am deeply indebted to Mr. Parag Nagda (Branch Manager, MOSL Seawoods) for giving me an opportunity and guidance, invaluable help and cooperation to successfully complete the project.

I am grateful to Mr. Nimit Sethi (Business Development Manager, MOSL) for his help and cooperation. I am very thankful to the management and staff of Motilal Oswal Securities Limited for their invaluable cooperation during my summer internship programme.

Last but not the least I would like to express my profound gratitude to my family and friends who have indirectly encouraged me in completing this study.

Jeevan Yadav Signature: ……………………

Date: …………………


TABLE OF CONTENTS

Sr. No.

Particulars Page no.

1 Executive summary IX2 Industry overview 10-13

3 Company overview 14-324 Research topic 335 Research problem 396 Research objectives 397 Hypothesis made for research 39

8 Research methodology 399 Sampling 39

10 Data analysis and interpretations 40-4911 Tables 40, 42,45&48

12 charts 40. 42,45&4813 Recommendation and suggestions 50

14 Conclusion 5015 Limitations of the study 51

16 Implication of project for the company 5117 Scope for future study 51

18 Annexure 52-5319 Bibliography 54


LIST OF TABLES

Table no.

Particulars Page number

1 The motive behind an investor based on the basis of gender and age groups

40

2 Preferred investment options of investors 42

3 Most preferred sector by the investors 45

4 Parameters considered by an investor 48


LIST OF CHARTS

Chart no. Particulars Page number

1 The motive behind an investor based on the basis of gender and age groups

40

2 Preferred investment options of investors 42

3 Most preferred sector by the investors 45

4 Parameters considered by an investor 48


EXECUTIVE SUMMARY

The project contains the brief description of the Stock market and Motilal Oswal Securities

Limited. It include milestone of MOSL since inception and different awards and recognition that

is achieved in it journey. Different product and services that are offered at MOSL are also

described in the report. Brief description about MOSL’s different department is stated in the

report. SWOT analysis is done for the company on basis of secondary data that is extracted from

the MOSL website. It also includes the study and comparison of other investment products

available in the market like Insurance plans, Mutual Funds, Savings account, Provident funds,

Postal savings, Fixed Deposits and Stocks available in the market. It also includes the various

options that are available for the investors in financial market.

A survey was conducted to gather primary data to judge the factors that influence investors

before they invest in any of the investment tools and thus the first part of the report scrutinizes

the investor’s perception and analyzes the relation between the features of the products and the

investors’ requirements. With this back ground an attempt has been made in this paper to

categorize investors based on various demographic factors such as age, sex, income level and

occupation. It also contains demographic factors and psychographic factors of an investor.

Which clearly gives idea how age, gender, income and occupation plays an important role in

taking any type of investment decision.


INDUSTRY OVERVIEW

Indian stock market marks to be one of the oldest stock market in Asia. It dates back to the close

of 18th century when the East India Company used to transact loan securities. In the 1830s,

trading on corporate stocks and shares in Bank and Cotton presses took place in Bombay.

Though the trading was broad but the brokers were hardly half dozen during 1840 and 1850.

An informal group of 22 stockbrokers began trading under a banyan tree opposite the Town Hall

of Bombay from the mid-1850s, each investing a (then) princely amount of Rupee 1. This

banyan tree still stands in the Horniman Circle Park, Mumbai. In 1860, the exchange flourished

with 60 brokers. In fact the 'Share Mania' in India began with the American Civil War broke and

the cotton supply from the US to Europe stopped. Further the brokers increased to 250. The

informal group of stockbrokers organized themselves as the The Native Share and Stockbrokers

Association which, in 1875, was formally organized as the Bombay Stock Exchange (BSE).

BSE was shifted to an old building near the Town Hall. In 1928, the plot of land on which the

BSE building now stands (at the intersection of Dalal Street, Bombay Samachar Marg and

Hammam Street in downtown Mumbai) was acquired, and a building was constructed and

occupied in 1930.

Premchand Roychand was a leading stockbroker of that time, and he assisted in setting out

traditions, conventions, and procedures for the trading of stocks at Bombay Stock Exchange and

they are still being followed.

Several stock broking firms in Mumbai were family run enterprises, and were named after the

heads of the family.


The following is the list of some of the initial members of the exchange, and who are still

running their respective business:

D.S. Prabhudas & Company (now known as DSP, and a joint venture partner with Merrill

Lynch)

Jamnadas Morarjee (now known as JM)

Champaklal Devidas (now called Cifco Finance)

Brijmohan Laxminarayan

In 1956, the Government of India recognized the Bombay Stock Exchange as the first stock

exchange in the country under the Securities Contracts (Regulation) Act.

The most decisive period in the history of the BSE took place after 1992. In the aftermath of a

major scandal with market manipulation involving a BSE member named Harshad Mehta, BSE

responded to calls for reform with intransigence. The foot-dragging by the BSE helped radicalize

the position of the government, which encouraged the creation of the National Stock Exchange

(NSE), which created an electronic marketplace. NSE started trading on 4 November 1994.

Within less than a year, NSE turnover exceeded the BSE. BSE rapidly automated, but it never

caught up with NSE spot market turnover.

The second strategic failure at BSE came in the following two years. NSE embarked on the

launch of equity derivatives trading. BSE responded by political effort, with a friendly SEBI

chairman (D. R. Mehta) aimed at blocking equity derivatives trading. The BSE and D. R. Mehta

succeeded in delaying the onset of equity derivatives trading by roughly five years. But this

trading, and the accompanying shift of the spot market to rolling settlement, did come along in

2000 and 2001 - helped by another major scandal at BSE involving the then President Mr. Anand

Rathi. NSE scored nearly 100% market share in the runaway success of equity derivatives

trading, thus consigning BSE into clearly second place. Today, NSE has roughly 66% of equity

spot turnover and roughly 100% of equity derivatives turnover.

Stock Exchange provides a trading platform, where buyers and sellers can meet to transact in

securities.


Capital Market: The capital market is divided into two segments which are as following:

a) Primary Market

b) Secondary Market

Primary Market: Most companies are usually started privately by their promoters. However the

promoters’ capital and the borrowed capital from banks or financial institutions might not be

sufficient for running the business over the long term. That is when corporate and the

government looks at the primary market to raise long term funds by issuing securities such as

debt or equity. These securities may be issued at face value, at premium or at discount. Let us

understand the meaning of these terms:

Face Value: Face value is the original cost of the security as shown in the

certificate/instrument. Most equity shares have a face value of Rs. 1, Rs. 5, Rs. 10 or Rs.

100 and do not have much bearing on the actual market price of the stock. When issuing

securities, they may be offered at a discount or at a premium.

Premium: When the security is offered at a price higher than the face value it is called a

premium

Discount: When the security is offered at a price lower than the face value it is called a

discount.

Secondary Market: The secondary market provides liquidity to the investors in the primary

market. Today we would not invest in any instrument if there was no medium to liquidate our

position. The secondary markets provide an efficient platform for trading of those securities

initially offered in the primary market. Also those investors who have applied for shares in an

IPO may or may not get allotment. If they don‘t then they can always buy the shares (sometimes

at a discount or at a premium) in the secondary market. Trading in the secondary market is done

through stock exchange. The Stock exchange is a place where the buyers and sellers meet to

trade in shares in an organized manner.

The stock exchange performs the following functions:


Provide trading platform to investors and provide liquidity

Facilitate Listing of securities

Registers members - Stock Brokers, sub brokers

Make and enforce by-laws

Manage risk in securities transactions

Provides Indices

There are two leading stock exchanges in India which help us trade are:

National Stock Exchange: National Stock Exchange incorporated in the year 1992

provides trading in the equity as well as debt market. Maximum volumes take place on

NSE and hence enjoy leadership position in the country today

Bombay Stock Exchange: BSE on the other hand was set up in the year 1875 and is the

oldest stock exchange in Asia. It has evolved in to its present status as the premier stock

exchange. At BSE you will find some scripts listed that are not available on NSE. Also

BSE has the largest number of scripts which are listed.

COMPANY OVERVIEW

INTRODUCTION


Motilal Oswal Securities Ltd. (MOSL) was founded in 1987 as a small sub-broking unit, with

just two people running the show. Focus on customer-first-attitude, ethical and transparent

business practices, respect for professionalism, research-based value investing and

implementation of cutting-edge technology has enabled us to blossom into an over 1600 member

team.

Today it has a well diversified financial services firm offering a range of financial products and

services such as Wealth Management, Broking & Distribution, Commodity Broking, Portfolio

Management Services, Institutional Equities, Private Equity, Investment Banking Services and

Principal Strategies.

It has a diversified client base that includes retail customers (including High Net worth

Individuals), mutual funds, foreign institutional investors, financial institutions and corporate

clients. It headquartered in Mumbai and as of June 30th, 2011, had a network spread over 586

cities and towns comprising 1,607 Business Locations operated by our Business Partners and us.

As at June 30th, 2011, we had 722,303 registered customers.

Its institutional business unit has relationships with several leading foreign institutional investors

(FIIs) in the US, UK, Hong Kong and Singapore. In a recent media report it was rated as one of

the top- 10 brokers in terms of business transacted for FIIs.

The retail business unit provides equity investment solutions to more than 200000 investors

through 1160 outlets spanning over 363 cities. These solutions are provided by a force of over

2000 employees and over 780 Business Associates. We provide advice-based broking (equities

and derivatives), portfolio management services (PMS), e-Broking, depository services,

commodities trading, IPO and mutual fund investment advisory services.

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 their Vision.

Motilal Oswal Financial Services Ltd

Motilal Oswal Financial Services Ltd consists of four companies.

a) Motilal Oswal Investment Advisors Pvt. Ltd. is our Investment Banking arm with

collective experience of over 100 years in investment banking/corporate banking and

advisory services.

b) Motilal Oswal Commodities Broker (P) Ltd. has been providing commodity trading

facilities and related products and services since 2004.

c) Motilal Oswal Venture Capital Advisors Private Limited has launched the India

Business Excellence Fund (IBEF), a US$100 mn India focused Private Equity Fund


d) Motilal Oswal Securities Ltd. (MOSt) our services include equities, derivatives, e-

broking, portfolio management, mutual funds, commodities, IPOs and depository

services.

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.

Journey of MOSL since 1987

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.

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.

1994:

MOSt acquires NSE Membership and plans for major expansion of its retail network.

”Motilal Oswal” enters Institutional Broking business.

1995:

”Motilal Oswal” gets incorporated as Motilal Oswal Securities Ltd.


1996:

Wealth Creation Study started. First of its kind study initiated to identify biggest and

fastest wealth creating companies in Indian Stock markets.

1998:

Mr. Motilal Oswal joins the Governing Board of The Stock Exchange, Mumbai.

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.

2000:

Received the Asia Money award for the Best Domestic Equity house.

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.

Becomes a Depository Participant of Central Depository Services Limited (CDSIL).

2001:

Legendary marketing guru Shunu Sen’s services taken to revitalize retail marketing

strategy and branding efforts.

Starts offering Derivatives products and advisory services on both BSE as well as NSE.

2002:


Mr. Navin Agarwal, Head of Equity Research & Institutional sales, inducted in the Board

of Directors.

Received the Asia Money Award - 2nd best among Indian Brokerage firms.

Retail network completes coverage of 75 cities in India.

Direct servicing of HNI clients is initiated.

Crosses 10,000 Depository accounts

2003:

Enters the mutual fund and IPO distribution business.

2004:

Presence expanded to 375 Business locations in 190 cities.

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.

2005:

Asia money Brokers Poll 2005 rates Motilal Oswal Securities - Best Local Brokerage,

Most Independent Research Brokerage, Best in Sales and Service.

Launches two new Portfolio Management Schemes - Value Hedging for derivatives and

Discover Value for the Rs.5 lakh to Rs.50 lakh category.

2006:

Motilal Oswal Financial Services Ltd ties-up with State Bank of India to offer online

trading.

Motilal Oswal Financial Services Ltd was declared as the Best Research House for Indian

Stocks in 2006 as per AQ Research.

Avaya Global ranked MOSL as the second best company in the Financial Sector for

customer responsiveness.


Enters Private Equity and Investment Banking businesses.

Value PMS gives 390% returns to its investors between Feb 2003 and March 2006.

2007:

The Strategic partnership between MOSL and SBI - EZtrade - reaches an important

milestone i.e. in less than a year it has managed to sign up more than 10,000 customers.

Starts Knowledge First campaign.

2008:

MOSL awarded the prestigious Nasscom - CNBC TV 18 IT User Award – 2008.

MOSL awarded 'The Best Franchisor in Financial Services' by Franchisee World

Magazine 2008 for the second consecutive year.

Motilal Oswal's India Business Excellence Fund raised USD 125 million, 25%

higher than the initial target of USD 100 million.

2009:

Motilal Oswal Financial Services purchased its new corporate office building based in

Prabhadevi, the heart of Mumbai city with a planned usable area of over 2, 00,000 sq ft.

The 14th Motilal Oswal Wealth Creation Study presentation held in Mumbai in

December 2009 and was covered live on CNBC TV18.

MOSL ranked No. 2 (Best Local brokerage) in the Asia Money Brokers Poll 2009 and

No. 2 (Best Indian Brokerage House) category by Institutional Investor.

2010:

The 15th Motilal Oswal Wealth Creation Study presentation was held in Mumbai on 15th

December 2010 and was covered live on CNBC TV18

Motilal Oswal Securities bagged the Best Performing Equity Broker (National) Award at

CNBC TV18 Financial Advisor Awards 2010 held in Mumbai. CNBC TV18 organized

Financial Advisor Awards 2010, in partnership with UTI MF. These awards are

authoritative evaluation backed by a robust methodology powered by India’s leading

rating house, ICRA.


Motilal Oswal Securities entered into a strategic alliance with Barclays Bank, for an

equity trading platform for its (Barclays) customers. This alliance provides Barclays

customers with the option to invest in equities, derivatives and IPOs, through MOSL.

Motilal Oswal Securities Limited bagged the QualTech Prize for Improvement - 2010 in

the Services Category on September 24, 2010. The Award winning project was a DMAIC

project done in Account Opening Department to reduce Account Opening Turnaround

Time.

Ashutosh Maheshvari, CEO, MOIAPL, bagged the “India M&A Investment Banker

award”, and Acquisition of Equipav (Brazil) by Shree Renuka Sugars (India) facilitated

by MOIAPL won the “ASIA PACIFIC CROSS-BORDER DEAL of the YEAR” at the

ASIA-PACIFIC M&A ATLAS AWARDS held on September 23, 2010, organized by

Global M&A Network.

MOSt Shares M50 ETF was listed on NSE on July 30, 2010.

MOSt Shares M50 ETF NFO which was open for subscription from June 30, 2010 till

July 19, 2010 raised over Rs.235 crores, making it the largest amount raised during the

NFO by any equity ETF in the past 5 years (Data source: Value Research Online.com).

Motilal Oswal Asset Management launches its maiden mutual fund offering - MOSt

Shares M50.

2011:

At the second ASIA’s BEST EMPLOYER BRAND AWARDS held in Singapore on

22nd July, 2011, Motilal Oswal Financial Services bagged awards in two categories:

Award for Excellence in HR through Technology & Award for Managing Health at

Work.

Motilal Oswal in association with Zee Business hosted the first of its series of seminars

under its investor’s education initiative called Investor Ki Kahani Usi Ki Zubani on

July 2, 2011 at BSE in Mumbai. The seminar saw a colossal turnout with more than 750

investors attending the session.

Mr. Raamdeo Agrawal was honoured with an award for Special Contribution to Indian

Capital Market by Zee Business at the ‘INDIA’S BEST MARKET ANALYST

AWARDS 2011 on April 29, 2011.


Our Analysts Mr. Dhirendra Tiwari & Mr. Harshad Borawake won the Best Market

Analyst Award for the categories Equity-Sectorial-Infrastructure and

Equity–Sectorial–Energy respectively at ‘INDIA’S BEST MARKET ANALYST

AWARDS 2011 organized by Zee Business on April 29, 2011.

Motilal Oswal Asset Management Company becomes India’s 1st AMC to ring The

NASDAQ Stock Market Opening Bell on 30 March 2011, to celebrate the launch of

Motilal Oswal MOSt Shares NASDAQ 100 - India’s First US Equities Based ETF.

Motilal Oswal MOSt Shares NASDAQ 100 - India’s First US Equities Based ETF gets

listed on NSE and BSE on 31st March, 2011.

Motilal Oswal Securities won 4 awards at the ET Now Starmine Analyst Awards 2010-

2011. This puts MOSL amongst the Top 3 Award winning Brokers at the ET NOW

Starmine Analyst Awards 2010-2011.

Motilal Oswal Mutual Fund launches MOSt Shares NASDAQ 100 - India’s first US

Equities based ETF tracking the NASDAQ-100 Index.

Motilal Oswal Mutual Fund’s MOSt Shares M50 bagged the ‘Most Innovative Fund of

the Year’ Award at CNBC TV18-CRISIL Mutual Fund Award 2011 held in Mumbai.

Motilal Oswal MOSt Shares Midcap 100 ETF – India’s First Midcap Index ETF; based

on CNX Midcap Index was listed on NSE on February 4, 2011.

Motilal Oswal Asset Management launches MOSt Shares M100 ETF - India’s First

Midcap ETF; based on CNX Midcap Index.


PEOPLE BEHIND THE SUCCESS OF MOSL

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.

Mr. Raamdeo Agrawal

JMD MOSL & 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”


AWARDS AND RECOGNITION

At the 2nd ASIA’s BEST EMPLOYER BRAND AWARDS

07/23/2011

At the second ASIA’s BEST EMPLOYER BRAND AWARDS held in Singapore on

22nd July, 2011, Motilal Oswal Financial Services bagged awards in two categories:

Award for Excellence in HR through Technology & Award for Managing Health at

Work.

ET Now Starmine Analyst Awards 2010-2011


05/13/2011

CRISIL Mutual Fund Award 2011

05/13/2011

Motilal Oswal Mutual Fund’s MOSt Shares M50 bagged the ‘Most Innovative Fund of

the Year’ Award at CNBC TV18-CRISIL Mutual Fund Award 2011 held in Mumbai.

CNBC TV18 Financial Advisor Awards 2010

12/09/2010

Motilal Oswal Securities Ltd. was adjudged as the 'Best Performing Equity Broker

(National)' at the CNBC TV18 Financial Advisor Awards - 2010


Asia-Pacific Cross Border Deal of the Year in 2010

09/24/2010

Motilal Oswal Investment Banking wins the “Asia-Pacific Cross Border Deal of the

Year” at the ASIA-PACIFIC M&A ATLAS AWARDS in 2010

MOSL appears in Limca Book of Records

03/16/2008

MOSL creates one of India's largest Equity Dealing & Advisory rooms, spread over

26,000 sq ft in Malad, Mumbai


DIFFERENT DEPARTMENT AT MOTILAL OSWAL

MARKETING DEPARTMENT

The main aim of marketing activities at Motilal Oswal is that the customer should get enough

guidance to join the company and how he can get the best service than any other stockbroker.

Marketing Mix:

Products

Price

Place

Promotion

PRODUCTS AND SERVICES

Equity

Derivatives

Online trading

Insurance distribution

Commodities

Mutual funds distribution

IPOs

Depository services

Loan against shares

Asset Management

Private Equity

Investment Banking

Wealth Management


FEW STRATEGY USED BY MOSL TO MARKET ITS PRODUCT

‘Knowledge First’ Campaign

MOFSL introduced a new brand philosophy. The relentless focus on research and insight, which

is the DNA of the company, has manifested itself in the brand idea - ‘Knowledge First’. This

simple philosophy of 'Knowledge First' has been brought alive through a multimedia campaign

in TV, print, outdoor and the web.

WEALTHWISE

Building on their promise of providing knowledge to investors, MOSL introduced a unique

initiative - Wealthwise. This investor education programme (televised on CNBC) consisted of a

series of investor camps that provided customers wealth management advice for different life

stages.


PURPLE

Purple is their recently launched Private Banking brand that provides holistic wealth

management solutions for Individual, Family and Business needs of High Net Worth Individuals

(HNIs). To provide these clients a gold standard private banking experience, they introduced a

series of Purple lounges in different cities.


HUMAN RESOURCE DEPARTMENTMOFSL has grown at a scorching pace, not only in terms of business but also in terms of its most

valuable asset -people. They have an ever-growing employee strength of 2315 associates that

operates out of a rapidly expanding Company network.

HR at Motilal Oswal, on the one hand strives to make every employee of the organization its

brand ambassador and on the other hand make the Motilal Oswal brand stand for the best people

practices.

The 3 pillars of HR strategy are:

a. A clear and relentless (persistent) focus on leadership development

b. Stringent (severe) focus on the identification and development of 'High

Potentials' at all levels

c. Investment in technology to deliver state-of-the-art HR processes across the

organization in a time and cost efficient manner

The key initiatives towards implementation of the strategy have been:

Balanced Scorecard and KRA implementation:

Leadership Development: Style and competency assessment for the top tier

management of the Company was carried out and an intensive Executive Coaching

programme based on Individual Development Plans has been started for 13 of the top

leaders of the organization.

Technology: The recruitment process has been enabled and implemented using the

existing HR software of MyZone. This has been implemented in Mumbai during the

current year and will be rolled out across all regions during this year.

SWOT ANALYSIS OF MOTILAL OSWAL


STRENGTHS

Large and diverse distribution network

Strong research and sales teams

Brand recognition

Experienced top management

Strong financial results

WEAKNESSES

Charges are high compare to other companies in industry

OPPORTUNITIES

Growing Financial Services industry's share of wallet for disposable income

Huge market opportunity for wealth management service providers as Indian

Wealth management business is transforming from mere wealth safeguarding to growing

wealth.

Regulatory reforms would aid greater participation by all class of investors

Leveraging technology to enable best practices and processes

Increased appetite (need) of Indian corporate for growth capital

THREATS

Execution risk

Slowdown in global liquidity flows

Increased intensity of competition from local and global players

Unfavorable economic conditions

RESEARCH TOPIC

Investor behavior analysis on the basis of demographics and psychographics factors of the

investor considering the parameters like age, gender and income groups and also some


psychological parameters that will attract the investor towards that particular investment. This

analysis describes why an investor will opt a particular investment and the motive behind the

investment and other objectives of investment.

INTRODUCTIONThere are several parameters that an investor will think before investing like return, flexibility

and etc but the markets will face a question mark in knowing the pulse of an investor. So a study

must be made on the demographics and psychographics of the investor such that the market can

know the pulse of an investor and can act upon it. These are the results of such a survey that was

made on the investor. Investor behavior analysis deals with analyzing the behavior of an investor

based on his demographic and psychographic factors like age, gender and income groups. This

depicts what would be a preferred portfolio of an investor at an age. This will be helpful to the

stock brokers and portfolio managers so that they can offer better portfolios to their investors.

This analysis will show the mentality of an investor and his preferences clearly and concisely.

DEMOGRAPHIC AND PSYCHOGRAPHIC FACTORS

Demographic: Statistical socio-economic characteristics or variables of a population, such as

age, sex, education level, income level, marital status, occupation, religion, birth rate, death rate,

average size of a family, average age at marriage. A census is a collection of the demographic

factors associated with every member of a population.

Psychographic: This includes Activity, Interest, and Opinion (AIO) Attitudes Values of an

investor when he looks at a particular investing option.

INVESTMENT NEEDS OF AN INVESTOR

By and large, most investors have eight common needs from their Investments are as following:


1. Security of original capital: The chance of losing some capital has been a primary need.

This is perhaps the strongest need among investors in India, who have suffered regularly

due to failures of the financial system.

2. Wealth accumulation: This is largely a factor of investment performance, including

both short-term performance of an investment and long-term performance of a portfolio.

Wealth accumulation is the ultimate measure of the success of an investment decision.

3. Comfort factor: This refers to the peace of mind associated with an investment.

Avoiding discomfort is probably a greater need than receiving comfort. Reputation plays

an important part in delivering the comfort factor.

4. Tax efficiency: Legitimate reduction in the amount of tax payable is an important part of

the Indian psyche. Every rupee saved in taxes goes towards wealth accumulation.

5. Life Cover: Many investors look for investments that offer good return with adequate

life cover to manage the situations in case of any eventualities.

6. Income: This refers to money distributed at intervals by an investment, which are usually

used by the investor for meeting regular expenses. Income needs tend to be fairly

constant because they are related to lifestyle and are well understood by investors.

7. Simplicity: Investment instruments are complex, but investors need to understand what is

being done with their money. A planner should also deliver simplicity to investors.

8. Ease of withdrawal: This refers to the ability to invest long term but withdraw funds

when desired. This is strongly linked to a sense of ownership. It is normally triggered by

a need to spend capital, change investments or cater to changes in other needs. Access to

a long-term investment at short notice can only be had at a substantial cost.

9. Communication: This refers to informing and educating investors about the purpose and

progress of their investments. The need to communicate increases when investments are

threatened.

Security of original capital is more important when performance falls.

Performance is more important when investments are performing well.

Failures engender a desire for an increase in the comfort factor.


Perfect investment would have been achieved if all the above-mentioned needs had been met to

satisfaction. But there is always a trade-off involved in making investments. As long as the

investment strategy matches the needs of investor according to the priority assigned to them, he

should be happy.

The Ideal Investment strategy should be a customized one for each investor depending on his

risk-return profile, his satisfaction level, his income, and his expectations. Accurate planning

gives accurate results. And for that there must be an efficient and trustworthy roadmap to achieve

the ultimate goal of wealth maximization.

CHOOSING THE RIGHT INVESTMENT OPTIONS


After understanding the concept of investment, the investors would like to know how to go about

the task of investment, how much to invest at any moment and when to buy or sell the securities,

This depends on investment process as investment policy, investment analysis, valuation of

securities, portfolio construction and portfolio evaluation and revision. Every investor tries to

derive maximum economic advantage from his investment activity. For evaluating an investment

avenues are based upon the rate of return, risk and uncertainty, capital appreciation,

marketability, tax advantage and convenience of investment. The following Table should give

the clear picture relating to the investors’ investment decisions in various financial market

instruments. The choice of the best investment options will depend on personal circumstances as

well as general market conditions. For example, a good investment for a long-term retirement

plan may not be a good investment for higher education expenses. In most cases, the right

nvestment is a balance of three things: Liquidity, Safety and Return.

INVESTMENT OPTIONS IN INDIA


Fixed Deposits – They cover the fixed deposits of varied tenors offered by the commercial

banks and other non-banking financial institutions. These are generally a low risk prepositions as

the commercial banks are believed to return the amount due without default. By and large these

FDs are the preferred choice of risk-averse Indian investors who rate safety of capital & ease of

investment above all parameters. Largely, these investments earn a marginal rate of return of 6-

8% per annum.

Government Bonds – The Central and State Governments raise money from the market through

a variety of Small Saving Schemes like national saving certificates, Kisan Vikas Patra, Post

Office Deposits, Provident Funds,etc. These schemes are risk free as the government does not

default in payments. But the interest rates offered by them are in the range of 7% - 9%.

Money-back insurance - Insurance in India is mostly sold and bought as investment products.

They are preferred because of their add-on benefits like financial life-cover, tax-savings and

satisfactory returns. Even if one does not manage to save money and invest regularly in financial


instruments, with insurance, the policyholder has no choice. If he does not pay his premiums on

time, his insurance cover will lapse. Money-back Insurance schemes are used as investment

avenues as they offer partial cash-back at certain intervals. This money can be utilized for

children’s education, marriage, etc.

Endowment Insurance – These policies are term policies. Investors have to pay the premiums

for a particular term, and at maturity the accrued bonus and other benefits are returned to the

policyholder if he survives at maturity.

Bullion Market – Precious metals like gold and silver had been a safe heaven for Indian

investors since ages. Besides jewellery these metals are used for investment purposes also. Since

last 1 year, both Gold and Silver have highly appreciated in value both in the domestic as well as

the international markets. In addition to its attributes as a store of value, the case for investing in

gold revolves around the role it can play as a portfolio diversifier.

Stock Market – Indian stock markets particularly the BSE and the NSE, had been a preferred

destination not only for the Indian investors but also for the Foreign investors.. Although Indian

Markets had been through tough times due to various scams, but history shows that they

recovered very fast. Many types of scrip had been value creators for the investors. People have

earned fortunes from the stock markets, but there are people who have lost everything due to

incorrect timings or selection of fundamentally weak companies.

Real Estate- Returns are almost guaranteed because property values are always on the rise due

to a growing world population. Residential real estate is more than just an investment. There are

more ways than ever before to profit from real estate investment.

Mutual Funds - There is a collection of investors in Mutual funds that have professional fund

managers that invest in the stock market collectively on behalf of investors. Mutual funds offer a

better route to investing in equities for lay investors. A mutual fund acts like a professional fund

manager, investing the money and passing the returns to its investors. All it deducts is a

management fee and its expenses, which are declared in its offer document.

RESEARCH PROBLEM


To find the demographic and psychographic behavior of an investor.

To find the exact need of investor’s view towards investment decision.

To find what an investor opts while deciding for an investment.

RESEARCH OBJECTIVES

To know the investors' profile with respect age, gender and income groups and also some

psychological parameters that will attract the investor towards that particular investments.

To investigate the nature of investor’s towards investment decision.

To find the reason why an investor opt a particular investment and the motive behind the

investment

HYPOTHESIS MADE WHILE RESEARCH

This hypothesis claim that the market situation is in favor of investor and no certain crisis exists

in market which can affect investors to invest in stock market.

RESEARCH METHODOLOGY

SAMPLING

The type of sample considered in this was convenient random sampling 100 persons in the Navi

Mumbai were drawn at random from investor associated with MOSL through telephonic

interview. The area of the study has covered different parts of Navi Mumbai where all classes of

people are living.

Research design: Descriptive Research

Sources of data: Primary Data

Secondary Data

Sampling Design: Convenience Sampling

Sample Size: 100

Tools for analysis

a) Percentage analysis

b) Analysis and discussion

DATA ANALYSIS AND INTERPRETATION


I. The motive behind an investor based on the basis of gender and age

groups.

Age (yrs)→ 20-30 30-40 40-50 Above 50

Motive↓ Male Female Male Female Male Female Male Female

High Yield

Returns 42.80% 25% 20% 12.50% 17% 50% 50%

To Secure

Future 28.50% 75% 66.66% 62.50% 66.66% 100.00% 40% 25%

Tax Benefit 14.25% 6.66% 25% 16.66% 10% 25%

Due to Inflation 14.25% 6.66%

Total 100% 100% 100% 100% 100% 100% 100% 100%

Table-1

Chart-1

Comments:

42.8% of the men at 20-30 ages are choosing high yield returns and it is their motive

because at this age his ideas will be running around luxurious life. So he will be ready to

take higher amount of risk to get good returns.


Mal

e

Fem

ale

Mal

e

Fem

ale

Mal

e

Fem

ale

Mal

e

Fem

ale

20-30 30-40 40-50 Above 50

0.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%40.00%45.00%50.00%

Real EstatePost Office SchemesMutual FundsInsurance(ULIPS)SharesFixed DepositsGold

Where 66.66% of men in 30-50years of age are preferring security because they will have

a family at this age and their ideology will look at safeguarding the future of their

children and to make them look happy, generally being a parent he will be planning for

the education of his child and in saving some amount for matching the needs of his

children, so he will step into the shoes of secured future and will put a comma to his

aggressive behavior and will become conservative and also starts investing in those

options which are much safer when compared to his previous investments.

Majority of the men who cross the age group of 50 prefer high yield return (50%) and

40% of them prefer security.

Women are good at planning and are conservative in nature and they are focusing for

secured future. This can be seen in women of 20-50 age groups. Because generally a

woman gets married at the age of 23 so her thinking will always be about her family and

their future. Even if she is not married she has a firm idea of securing her future because

she being a good planner always thinks about the future and will always prefer investing

in such options which are less risky.

Whereas women who have crossed 50years of age are focusing at high yield returns

because they are not having any burdens on them and their prime ideology is to give

something to her next generation so she is now ready to take risks for the sake of getting

higher returns. Here we can see a sea change in her mentality where she is becoming

aggressive from a conservative personality

Majority of the women are found to be conservative where her prime ideology is to have

secured return and women are found to be aggressive once they cross the age of 50 where

they are free from several economical burdens and family pressures as their children start

working somewhere and are done with their education and the family has good source of

income, so she is turning into an aggressive investor.

II. Preferred investment options of investors Age (yrs)→ 20-30 30-40 40-50 Above 50Preferred Options↓ Male Female Male Female Male Female Male FemaleReal Estate 28.5% 13.33% 16.66 16.66% 43% 50%


%Post Office Schemes 66.66%

16.66% 33.33% 29% 25%

Mutual Funds 14.25% 50% 66.66%16.66

% 28%

Insurance(ULIPS) 14.25% 25% 33.33% 25%

16.66% 33.33% 12.50%

Shares 28.5% 12.50%16.66

%

Fixed Deposits 14.25% 25% 66.66% 37.50%16.66

% 16.66% 12.50%

Gold 26.66% 25%16.66

%Total 100% 100% 100% 100% 100% 100% 100% 100%

Table-2

Preferred investment options of investors

Male Female Male Female Male Female Male Female20-30 30-40 40-50 Above 50

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

50.00%

Real EstatePost Office SchemesMutual FundsInsurance(ULIPS)SharesFixed DepositsGold

Charts -2

Comments: Male:

Majority of the men in 20-30 age group are giving preference to real estate and shares as

there motive is high yield returns. Generally there is much risk involved in real estate as


the prices of the land keeps fluctuating. Even then men are interested in investing on real

estate because of its return. It is known that shares is a risky trade and is compared to

gambling but it has its taboo because of the returns. So men are ready to take the risk by

investing in real estate and shares only by looking at the returns that they get.

Men in 30-40 age groups prefer investing in insurance and gold. It is found that ULIPS is

not a risky investment because it covers some part of insurance and the other that are

units which he can trade. This option will generally preferred by this age group people to

secure the future of their children or because of some other ideology. The next option

gold is having some safety where there is less risk and the prices of gold are always

found to be rising.

50 and above age groups are preferring real estate as we have seen that they are interested

in high yield returns. Generally people at this age group are investing in real estate with

an ideology of giving a home to their next generations and also because of some ancestral

beliefs in India which say that investing in land is always safe. They are interested in real

estate because they can have a fixed asset in hand and can serve their next generations to

cash upon it which can match their unexpected needs.

Female:

Women at 20-30 age groups prefer mutual funds because compared to shares there is

lesser risk involved in mutual funds. Mutual funds offer a return ranging between 10-20%

per annum and are safe because they are handled by good companies and are maintained

by professionals. There is less risk involved in this area of investment as it has some

fixed calculations and is handled properly by the mutual fund companies so as to sustain

in the market and to attract more number of investors. Companies like UTI and others are

found to be the masters in this area and are having happy customers.

Where 30-40 age group women prefer fixed deposits, insurance and gold. Though the

return is less in fixed deposits, ULIPs they are interested in investing here because there

is less risk involved in these areas. Gold also has less risk when compared to other


investing options as it is a onetime investment and majority of them feel it as a fixed

asset.

Like 30-40 age group women 40-50 age group women also prefer post office schemes

and insurance (ULIPS) as they are secured.

Women above 50years age group prefer real estate and mutual funds as real estate fetches

higher returns and mutual funds are safer.

III. Most preferred sector by the investors

Age (yrs)→ 20-30 30-40 40-50 Above 50


Sector↓ Male Female Male Female Male Female Male Female

Power28.50

% 6.66%16.66

% 43% 12.5%

IT 20% 37.50%16.66

% 16.66%

Banking57.10

% 75%66.66

% 50%33.32

% 83.33% 29% 50%

Automobile14.25

% 6.66% 12.50%16.66

% 12.5%

FMCG 25% 6.66%16.66

% 28% 25%

Others16.66

%Total 100% 100% 100% 100% 100% 100% 100% 100%

Table-3

Most preferred sector by the investors


0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

PowerITBankingAutomobileFMCGOthers

Chart-3

Comments:


Male:

Men at 20-30 age groups prefer banking and power. It was observed that these industries

are performing well. Even new players are performing better and because of this scenario

there is much taboo for banking. There are several reforms which are taking place in

power sector and big players have entered this sectored because of which people are

planning to look at these sectors aiming for higher returns.

30-40 age group people prefer banking and IT. Here we can understand a fact that many

of the people are having their relatives or friends working in the IT sector because of

which there is soft corner towards this sector. IT has lost its taboo because of the recent

financial crisis even then some investors are interested in investing in this sector and it

was found that many of them are employees of IT industry and some are related to them.

Players like Infosys TCS are performing well and are always in news and are having

recognition across the globe. This is giving some hope to the investors. Some instances

like Satyam would have affected this situation and also the recent financial crisis. But,

because of government taking necessary actions people gained some confidence on this

sector. Also there is one more reason for people’s interest towards this sector i.e., the

workforce of the IT. So generally they try to safeguard their jobs by contributing

something to the industry back (If share value increases the company will get more

market share and more agreements.)

Men at 40-50 age group are interested in investing in banking, pharmaceutical,

petrochemicals and infra. Here these people are interested in these sectors because of the

recent advancements in these sectors. Pharma and petrochemicals are always found to be

successful. There are several new players entering into these markets (If population is

increasing that is directly related to the increase in the number of patients.) Infrastructure

is the other industry which is growing today. The recent steps that are taken by the

government of India in favor of private players in these sectors is also contributing much

to this.

50 and above men prefer banking and power.

Female:


In addition to banking women at 20-40 age groups are preferring IT

Where 40-50 age groups are preferring banking

50 and above prefer same banking and power.

So it is found that banking sector is having charisma in the equity market at present and is

a growing industry. As our country’s employability is increasing the savings are also

increasing and at the same time several people are taking loans from banks so the market

of the banks is growing and even the charisma of it.

I. Parameters considered by an investor


Age (yrs)→ 20-30 30-40 40-50 Above 50Preferred Options↓ Male Female Male Female Male Female Male

Female

Flexibility 42.8% 25% 6.66% 12.5% 16.66% 50% 29% 25%Return 50% 13.33% 37.5% 50% 71% 50%Managed by Professional People 42.8% 20% 25% 16.66% 25%Risk Diversion 28.5% 25% 26.66% 12.5% 16.66%

Less Expenses 6.66% 12.5% 16.66% 33.33&

Total 100% 100% 100% 100% 100% 100%100% 100%

Table-4

Parameters considered by an investor


0

10

20

30

40

50

60

70

80

FlexibilityReturnManaged by Professional PeopleRisk DiversionLess Expenses

Chart-4

Comments:

Male:


20-30 age group people are preferring flexibility and returns. This is because of the recent

financial slump down where their money is locked in some investments so they have

changed their mindset towards flexibility and prefers returns as they are aggressive in

nature.

30-40 age group men prefer risk diversion as they are focused towards secured future and

maximum number of people of this age group has family and are willing to save for their

future needs.

40-50 age group men prefer return and flexibility as they are changing their idea towards

high yield returns and prefer flexibility to meet some unexpected financial problems.

50 and above age groups are focused towards returns

Female

Female in the age groups of 20-40 and 50 and above prefer return as they are aggressive

in nature. Where 40-50 age group women prefer less expenses.

RECOMMENDATION AND SUGGESTIONS


As most of investors are not clear with the investing decisions they tend to take wrong investing

decisions and finally they make huge loss. Hence MOSL should come up with some strategy

where they can give free advice or seminar to their new customer so that they get trapped into

huge loss. MOSL can design such portfolio which can suit an investor’s opinion.

CONCLUSION

As we know that in today’s scenario only 2 % of India’s total population are aware of equity

market and are investing in stock market and remaining 98% are not aware of equity market and

even if they are aware of it still they don’t invest in equity market due some past news don’t even

invest in stock market. It’s due to their wrong perception towards equity market mechanism or

they are not well advised by the stock broker. Hence we can conclude that a stock broker should

know or have exact about an investor’s need, motive behind their investment etc before

approaching him/her.

LIMITATIONS OF THE STUDY


Study is done on the basis of investor’s personal opinion.

It is done as per the view of investors dwelling in Navi Mumbai.

Sample size is very small.

IMPLICATION OF THE PROJECT FOR THE COMPANY

If MOSL understands the logic behind the survey on investor behavior, it can easily frame up its

strategies for a nearby future and can even encourage the investor to invest in such investment

schemes in which he/she wants. It can cut the cost which is unnecessarily spent on the non-

potential customer. MOSL should offer a portfolio that matches with the ideology of a customer

then he easily agrees to invest in that portfolio without any hesitation. Any operation that is done

by the company loses its credibility if it is not customer friendly or if it is rejected by the

customer. So, this study helps the companies to build such products to its investors which are in

reach of his/her mindset and thinking.

SCOPE FOR FUTURE STUDY

As we know that 98% of India’s population don’t invest in stock market due to their personal

view on stock market or their behavioral pattern which don’t allow them to invest in stock

market. As this report is done taking demographic factors into consideration. Same ways one can

take economic factors into consideration for future study.

ANNEXURE


QUESTIONNAIRE

Name:

Address:

Gender:

Age:

1. What do you think are the best options do you prefer to invest your money? (Choose

any one option from the list)

a. Real Estate

b. Post Office Schemes

c. Mutual Funds

d. Insurance(ULIPS)

e. Shares

f. Fixed Deposits

g. Gold

2. What is your average annual income?

a. Less than 2,00,000

b. 2 ,00,000 – 4,00,000

c. 4,00,000 - 6,00,000

d. More than 6,00,000


3. What is your motive behind investment? (Choose any one option from the list)

a. High Yield Returns

b. To Secure Future

c. Tax Benefit

d. Due to Inflation

4. In which Sector do you prefer and feel secure to invest in? (Choose any one option

from the list)

a. Power

b. IT

c. Banking

d. Automobile

e. FMCG

f. Others

5. What are the parameters that you consider while investing? (Choose any one option

from the list)

a. Flexibility

b. Return

c. Managed by Professional People

d. Risk Diversion

e. Less Expenses


BIBLIOGRAPHY

REFERENCES:

Www.moneycontrol.com

WWW.motilaloswal.com

www.sebi.gov.in/annualreport

Www.nseindia.com

MAGAZINE:

Dalal Street


http://Www.nseindia.com/

http://www.sebi.gov.in/annualreport

http://WWW.motilaloswal.com/

http://Www.moneycontrol.com/

SIP Report on Motilal Oswal Final-2[1]

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