Jaypee Business School A constituent of Jaypee Institute of Information Technology University A-10, Sector 62, Noida (UP) India 201 307 www.jbs.ac.in A comparative analysis of Indian depository participants with special reference to India Infoline ltd. Corporate Internship Report Internship Report submitted as a partial requirement for the award of the two year Master of Business Administration Program Name: RAJAT GUPTA MBA: 2009-11 Tele phone: 7838553854 E-mail: [email protected]Corporate Internship Supervisor Name: Mr.Sumit Anand Contact details: India infoline ltd. Mailing Address: sumit.anand@indiainfoline 1
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Jaypee Business School A constituent of Jaypee Institute of Information Technology University
A-10, Sector 62,Noida (UP) India 201 307
www.jbs.ac.in
A comparative analysis of Indian depository participants with special reference to India Infoline ltd.
Corporate Internship ReportInternship Report submitted as a partial requirement for the award of the two year
Master of Business Administration Program Name: RAJAT GUPTA MBA: 2009-11 Telephone: 7838553854 E-mail: [email protected]
Corporate Internship Supervisor
Name: Mr.Sumit AnandContact details: India infoline ltd.
Mailing Address: sumit.anand@indiainfoline
Faculty SupervisorDr. Jitendra Mishra
Start Date for Internship: 12-04-2010End Date for Internship: 12-06-2010
I hereby certify that I am RAJAT GUPTA have successfully completed my internship with
“INDIA INFOLINE LIMITED” in the month of April’10 (April 12, 2010 to June 12, 2010).
This is also to certify that this report is an original product and no unfair means like copying
etc have been used for its completion.
Name: RAJAT GUPTA
Signature
Date:
2
Acknowledgements
No task is single person effort, same is with this project .thus I would like to extend my
sincere thanks to all those people who helped me in accomplishing my Project success to all
faculty members, especially our director Prof. Ravi Shankar,for providing me wonderful
opportunity and guidance .i would like to extend my special gratitude to Dr.Jitendra Mishra
my faculty supervisor for providing excellent supervision for the successful completion of
this project . this project provides me a platform to increase my knowledge and empowered
me with a better understanding of concepts in the real world scenario and last but not least
special thanks to “India Infoline ltd” which accepted me in spite of my inexperience in the
field and gave me the opportunity to work and learn with them . My special thanks to my
corporate internship supervisor Mr. Sumit Anand who guided and helped me in completing
this project in spite of his busy schedule.
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Certificate from the Corporate Internship Providing Organization
This is to certify that Mr RAJAT GUPTA. Has successfully completed his internship with us in the month of -----April-----2010 from (12-04-10 and end 12-06-10). We wish him/her all the best for all his/her future endeavors.
Name of the Supervisor:
Signature:
Date:
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Table Of Content
5
S.No Topic Page Number
1 Corporate internship objective 6
2 Corporate internship executive summary 7
3 India infoline oraganisation profile 8-9
4 Industry analysis 10-39
5 Financial statement analysis analysis 40-52
6 Details of the specific field based project assigned during the internship
53-59
7 Finding 60
8 Suggestion 61
9 My take away- key learning’s 62
10 Project conclusion &recommendation 63-64
11 Annexures & refrences 65
Corporate internship objective:
The basic objectives of the summer internship programme are:
1. To analyze the financial position of India Infoline Limited and Reliance money .In
order to understand the business and competitive environment in which the
organization is working.
2. To get a feel of corporate life and its functioning and understand the working of
Organization.
3. To analyze the whole project and propose the recommendation which can prove
Out to be beneficial for the finance department of the company .
6
Executive Summary:
The India Infoline group, comprising the holding company, India Infoline Limited and its
wholly-owned subsidiaries, straddle the entire financial services space with offerings ranging
from Equity research, Equities and derivatives trading, Commodities trading, Portfolio
management Services, Mutual Funds ,Life Insurance, Fixed deposits, Govt. bonds and other
small savings instruments to loan products and Investment banking. India Info line also owns
and manages the websites www.indiainfoline. Command www.5paisa.com The Company has
a network of 976 business locations (branches and sub-brokers) spread across 365 cities and
towns. It has more than 800,000 customers.In today’s competitive world there are many
goods chasing few customers some are trying it expands their size and share of existing
market. As a result there are loser and winners. Winners are those who carefully analyze need
and indentify opportunities and create aloe rich offers for target customer .India
infoline.com/5paisa.com is related to share market, it is equity to caused organization tracing
its lineage to SSKI, a veteran solution company with over 8 decades of experience in the lead
in stock market.
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Company profile:
India Infoline Limited. The Groups principal activities are to provide brokerage and
financial services. It includes mutual funds, fixed deposits and government bonds. The Group
is a corporate agency of life insurance and commodities and operates through 1,361 business
locations spread over 428 cities India Infoline originally incorporated on October 18, 1995 as
PROBITY RESEARCHAND SERVICES PVT LTD. at Mumbai under the Companies Act,
1956 with Registration No. 1193797.and became a public limited companion April 28,
2000.The name of the Company was changed to India Infoline.comLimited on May 23, 2000
and later to India Infoline Limited on March 23, 2001. It is the first Company in India to
foray into the online distribution of Mutual Funds. It is a one-stop financial services shop,
most respected for quality of its advice, personalized service and cutting-edge technology.
The No.1 Corporate agent for ICICI Prudential Life Insurance Company. Research
acknowledged by Forbes as “Must Read for investor in South Asia “Listed on Bombay and
National Stock Exchange with a net worth of INR 200 crore and a market cap of over INR
1970 crore. The company has a network of 976 business locations (branches and sub-brokers)
spread across 365 cities and towns. It has more than800000 customers. It is registered with
NSDL as well as CDSL as a depository participant. Providing a one-step solution for clients
trading in the equity market.
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Unlike others, India Infoline has the concept of an Investment Team. The brains behind all
the investment strategies and decisions regarding Wealth
Management Services are:
Mr.Nirmal Jain
MBA: IIM-A, Chartered & Cost Accountant
Mr. R Venkataraman
MBA: IIM-B, B.Tech: IIT Kharagpur
Mr. Anand Tandon
MBA: IIM-A, B.Tech: IIT Kanpur
Mr.Venkat Subramanian
B.sc, Chartered Accountant.
Date of Establishment 1995Revenue 112.862 ( USD in Millions )Market Cap 27062.57172375 ( Rs. in Millions )Corporate Address 75 Nirlon Complex, Off Western Express
Management Details Chairperson - Nirmal Jain MD - Nirmal JainDirectors - A K Purwar, Falguni Sanghvi, Kapil Krishan, Kranti Sinha, Nilesh Vikamsey, Nirmal Jain, R Venkataraman, Sat Pal Khattar, Sunil Lotke
Business Operation Finance - Stock BrokingBackground India Infoline (IIL) is engaged in business of equities
broking, wealth advisory services and portfolio management services. The company was incorporated in October 1995 as Probity Research & Services and later in April 2000 the name was changed to India Infoline.com. Then in March 2001 the company again changed its name to India Infoline.
The company is part of India Infoline Group. It has pFinancials Total Income - Rs. 5716.359806 Million ( year ending
Mar 2009) Net Profit - Rs. 1058.253789 Million ( year ending Mar 2009)
FINANCIAL ANALYSIS :Assessment of the effectiveness with which funds (investment and debt) are employed in a firm, ( efficiency and profitability of its operations, and value and safety of debtors' claims against the firm's assets. It employs techniques such as 'funds flow analysis' and financial ratios to understand the problems and opportunities inherent in an investment or financing decision.
The balance sheet , p&l statement and cash flow statement has been attached in Annexure 1,2,3,4 respectively and according to above mention statements the performance of company
has been analyzed and comparison has been made up With its competitors with the help of financial ratio which are mention below the source of balance sheet is moneycontrol.com.
Ratio analysis :
Liquidity ratios:
Current ratio = Current Assets
Current Liabilities
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Company 2007 2008 2009
Indiainfolinelimited 1.16 1.11 1.11
Reliance capital 19.36 10.18 1.57
Graph:
Comments:
Current Ratio shows different trend for both india infoline limited And reliance capital for iifl it is almost same due almost same increase In current asset and current liability but in the case of reliance capital there was more increase in current liability as compare to current asset that lead to decrease in current ratio from2007 to 2009.
Quick ratio or Acid test ratio = Quick asset / Current liabilities
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Company 2007 2008 2009
Indiainfolinelimited 1.51 1.29 1.10
Reliance capital 19.34 10.14 26.31
Graph:
Comment:
As we can see the reliance quick assets were increasing continuously vis a vis its quick ratio increases and for iifl its almost same because Of change in the quick assets is same is current liability.
Inventory turnover ratio= Cost of goods sold/Average inventory
Company 2007 2008 2009
India infoline limited Na Na Na
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Reliance capital Na Na Na
Comment: as there is no inventory so there will be not any inventory turnover ratio.
It is a measurement of what proportion of a company's revenue is left over, before taxes and other indirect costs (such as rent, bonus, interest, etc.), after paying for variable costs of production as wages, raw materials, etc. A good operating margin is needed for a company to be able to pay for its fixed costs, such as interest on debt. A higher operating margin means that the company has less financial risk from the graph we can analyze that both iifl and rc has constant operating margin but RC has more operating margin. Means RC has more revenue is left over, before taxes and other indirect costs (such as rent, bonus, interest, etc.), after paying for variable costs of production as wages, raw materials, etc.
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Net profit margin = ( Profit after tax / Sales)
company 2007 2008 2009
Indiainfolinelimited 18.17 23.45 18.51
reliance capital 73.24 49.30 32.48
Graph:
Return on net worth = (Profit After tax/Net worth )%
Company 2007 2008 2009
Indiainfolinelimited 17.99 15.93 10.20
Reliance capital 12.51 17.01 14.45
Graph: -
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Comment :
Ratio of net income after taxes to total end of the year Net Worth. This ratio indicates the return on stockholder’s total equity. From The graph we can analyze that for India infoline it is countinuosly decreasing the reason is due to increase in net worth for RC we can say that its fluctuating is due to its net worth.
Indicates what proportion of equity and debt that the company is using to finance its assets. Sometimes investors only use long term debt instead of total liabilities for a more stringent test. RC has more debt then in IIFL it is due to more shareholder money.
Total debt to owner fund =
Company 2007 2008 2009
Indiainfolinelimited 0.28 0.13 0.00
Reliance capital 0.27 1.55 2.02
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Comment:
Debt funds typically mean funds borrowed on which the borrower has to pay interest. Debt funds and owner's funds together constitute the capital available to a firm for deployment in business. The profit that remains after payment of interest (and taxes) is the amount available for distribution to the business owners. We can analyze that reliance is working more on debt as comparison to indiainfoline .in 2009 there is no debt on indiainfoline.
Financial charge coverage ratio= Fixed-charge coverage ratio = (ebit + fixed charges before tax) / (fixed charged before tax + interest).
A measure of a firm's ability to meet its fixed-charge obligations: the ratio of ( net earnings before taxes plus interest charges paid plus long-term lease payments) to (interest charges paid plus long-term lease payments). iifl is getting better countinuosly but reliance net worth is more then iifl.
Activity ratio:
Inventory turnover ratio= Cost of goods hold/Average inventory.
Company 2007 2008 2009
Indiainfolinelimited Na Na Na
Reliance capital Na Na Na
Comment: As there are no inventories in these companies.
Total asset turnover ratio = net sales /average net fixed sales.
Profit margins tend to have high asset turnover, those with high profit margins have low asset turnover - it indicates pricing strategy. This ratio is more useful for growth companies to check if in fact they are growing revenue in proportion to sales.
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For reliance it was almost equal but for IIFL it was decreasing due to net sales.
PROJECT ASSIGENED DURING INTERNSHIP
A comparative analysis of Indian depository participants with special reference to India infoline ltd.
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Capital market:
A capital market is a market for securities (debt or equity), where business enterprises
(companies) and governments can raise long-term funds. It is defined as a market in which
money is provided for periods longer than a year, as the raising of short-term funds takes
place on other markets (e.g., the money market). The capital market includes the stock market
(equity securities) and the bond market (debt). Financial regulators, such as the UK's
Financial Services Authority (FSA) or the U.S. Securities and Exchange Commission (SEC),
oversee the capital markets in their designated jurisdictions to ensure that investors are
protected against fraud, among other duties.
Capital markets may be classified as primary markets and secondary markets.
Primary market: In primary markets, new stock or bond issues are sold to investors via a mechanism known
as underwriting. The primary market is that part of the capital markets that deals with the
issue of new securities. Companies, governments or public sector institutions can obtain
funding through the sale of a new stock or bond issue. This is typically done through a
syndicate of securities dealers. The process of selling new issues to investors is called
underwriting. In the case of a new stock issue, this sale is an initial public offering (IPO).
Dealers earn a commission that is built into the price of the security offering, though it can be