TOPIC

INTRODUCTION

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INTRODUCTION
Introduction to the study:
Mutual Fund Industry which is a relatively of a post-economic reforms phenomena in
India, has been expanding during this Period in branch and bound Many commercial banks,
insurance companies entered into mutual fund industry apart from foreign players In the early
years of evolution of mutual fund industry in the Indian financial market it was a monopoly and
continued to be the same till very recent time !hen many players both foreign and Indian entered
in the Mutual Fund Industry
!his increased the competition between the various firms working in the mutual fund
Industry !he need for developing various new
schemes arises so as to attract investors towards the firm and e"ually encouraging them to invest
!his growth in the Mutual Fund Industry and scope of increasing markets has further increased
the competition between the firms in the industry
!he competitions had given raise to demand for speciali#ed products and skills of
various individuals who can contribute towards the containment and growth of individual firms in
the mutual firm industry !his gave rise to various related organi#ations and individuals working
as speciali#ed teams in the various areas of mutual funds $ne such organi#ation is INDIA INFO
LINE PVT LTD it comes into pictures where the investors apply for the units in a Mutual Fund
schemes and verify the validity and eligibility of the investor and allots the units !he mutual fund
companies now receive millions of applications if a new scheme is launched

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!his is due to the wide spread awareness created among the urban and rural Population of India It
therefore becomes a &erculean task to Manage the flooding applications &owever it should be
noted that this is a $ne time activity similar to that of a short run pro'ect It is needless to (tate that
a given mutual fund firm will not be possessing !he technological, human and knowledge
resources to take up such a gigantic task, it is in fact not needed by a mutual fund firm to create
such a vast organi#ational structure when it is seen from the point of view scale of economies
Further to this problem, the mutual fund industry does not know where it stands in the current
volatile and turbulent environment !his may be !he reason they prefer to hire the services of
professionals firm with speciali#ed knowledge and )xpertise
!hese developments have led to an outcome that today, launching of mutual fund scheme has
become a well organi#ed activity which is accomplished through the coordinated endeavors of
task groups
!he asset management companies have designed various schemes in accordance with the
re"uirements of the various sections on investors on basis of e"uity linked, debt instruments
linked, commodities linked and specific industry linked instruments !he investor today is given
a wide range of options to invest in various types of funds according to his interests and
capabilities
Mutual funds enable even a small investor to investor to invest, as most of the mutual funds 'ust
start from a minimum amount of investment of *( +,,, hence even a small investor can invest
into a mutual fund and reap returns in the same proportions as the other big time investors !his
shows that mutual fund industry is one which aims at every section of the society !o deal with
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this large population of investors and the competition, the asset management company has been
forced to develop and design new schemes and hire the services of professionals
mutual fund industry involves various operations from the stage of identification of the target
group or defining a market segment, designing a scheme which comes up to the expectations and
aspirations of the target group or market segment, reaching the selected market through launching
the scheme which is thereby called .F$, till the stage of investing the amount raised in
accordance with the norms stipulated with offer document and distributing the returns to the
investor by way of dividend, after making ade"uate provision for taxation and other operating
costs /ll this process is well organi#ed and performed in a specific order !here are various
related organi#ations which speciali#e in the activities at various stages of the functioning of the
mutual funds
It is therefore felt expedient to examine the various intricacies involved in the new fund offer
0.F$1 (pecifically the various documents that are being processed, the parameters evolve either
customarily or by legal mandate to scrutini#e the applications 2arious stages involved in the
scrutiny, the re'ection criteria, the creation of human organi#ation to monitor the activities, the
communication channel and the structure of the organi#ed activities and the legal environment of
.F$ to some extent (uch a dissertation would help to come out with a comprehensive report
which may serve as a guide for the prospective entrants into mutual fund investment and to the
existing mutual fund investors to some extent
3
Limitations of study:
4 /nalysis of the applications is carried out by taking the applications from
*eliance e"uity Fund !he data available is therefore restricted by the design of
the application
4 !he inspection of applications is done on the basis of a sample of 1%,
applications !hough the sample is drawn randomly, the possibility of sampling
fluctuations affecting the findings cannot be ruled out
4 .umerical data like number of applications received, total subscription amount
received, statement of accounts, investor details, etc are not available and
therefore a description of these aspects is given
4 .F$ process may not be same for all mutual funds that are released It may
differ from one fund to other depending upon the si#e like the no of
applications received, subscription amount received, etc
Ne fund offer !NFO":
5hen a mutual fund asset management company announces Public issue of units of a new
fund6scheme it is called a .ew Fund $ffer 0NFO1
5hen a mutual fund company plans for a new fund offer it first informs to the registrar or the
back office functions provider like I.7I/ I.F$ 8I.) through email !his is called as 9.F$
8aunching Information Mail: send by the fund manager of the asset management company to the
.F$ coordinator of the I.7I/ I.F$8I.) In this Mail the fund manager will ask the .F$
coordinator to get ready for the new fund with the re"uired man power and software
+
8ater they send the sample application form, the key information memorandum 0#I$1 and offer
document to INDIA INFO LINE !his offer document sets forth concisely, necessary
information about the scheme for a prospective investor to make an informed investment decision
on the scheme described !he offer document contains the salient features of the scheme like
.F$ opening date, .F$ closing date, (cheme name, (cheme class, reopening date, plans
available banks involved, number of bank branches involved, minimum amount ; fresh purchase,
maximum amount ; fresh purchase, expected number of applications, entry load and exit load
!he unit manager or the .F$ coordinator will arrange a meeting where the /M< team, .F$
expert=s team, 7ata entry team, *econciliation team and the dispatch team will discuss and fix the
target dates by which the work has to be completed accordingly
%hat is a mutua& fund'
Mutual fund is a mechanism for pooling the resources by issuing to the investors and investing
funds in securities in accordance with ob'ectives as disclosed in offer document
Investments in securities are spread across a wide cross-section of industries and sectors and thus
the risk is reduced, 7iversification reduces the risk because all stocks may not move in the same
direction in the same proportion at the same time Mutual fund issues units to the investors in
accordance with "uantum of money invested by them Investors of mutual funds are known as
unit holders
!he profits or losses are shared by the investors in proportion to their investment !he mutual
funds normally come out with a number of schemes with different investment ob'ectives which
are launched from time to time / mutual fund is re"uired to be registered with (ecurities and
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)xchange ?oard of India 0(E)I1 which regulates securities markets before it can collect funds
from the public
Mutual fund is a collection of stocks and 6 bonds / mutual fund as a company brings together a
group of people and invests their money in stocks, bonds and other securities )ach investor owns
shares, which represent a portion of the holdings of the fund
5ith increased uncertainties or fluctuations in the primary market and decreasing bank interest
rates, mutual funds are gaining popularity day by day .ow-a- day=s mutual funds are performing
well will high returns to the investors !here are various types of schemes and plans available to
all type of investors
8et us assume that you inertia million rupees over night and want to invest the same to
get better returns you can consider the following investment avenues that are popular in Indian
context
<ompany shares
Fixed deposits in banks
@overnment bonds
Fixed deposits in .?F<
<hit fund
*eal estate
$ther local money lending options
A
Pros and con*s of the in+estments:
(.$ Investment
avenue
*isk *eturn )ffort re"uired to
track6maintain
investment
1 <ompany shares and
stocks
&igh &igh &igh
% Fixed deposits in
banks
8ow 8ow 8ow
- @ovt bonds Medium Medium Medium
3 Fixed deposits in
.?F<
&igh Medium Medium
+ <hit funds &igh Medium Medium
> *eal estate Medium Medium Medium
A $ther money lending
options
Medium Medium 7epends
,o you can ma-e money from a mutua& fund'
If the fund sells the securities that have increased in price, the fund has a capital gain Most of the
funds also pass on these gains to investors in a distribution
If fund holdings increase in price but are not sold by the fund manager, the funds shares increase
in price Bou can then sell your mutual fund units for profit Funds will also usually give you a
choice either to receive a check for distributions or to reinvest the earnings and get more shares
Income it earned from dividends on stocks and interest on bonds / fund pays out nearly all
income it receives over the year to fund owners in the form of a distribution
Ty.es of Funds:
C
Mutual funds also come in various si#es and shapes !here are about do#en fund classes but all of
them are derivatives of three basic classes are as follows
@rowth
Income
8i"uidity
/roth: 8ong term growth, since these funds invest in e"uities, they are also called as e"uity
funds !heir risk level is high so is the return
Income: !his type of fund provides regular income by investing in debt instruments like bonds,
debentures etc, ?ecause of their nature of investment, they are also called debt schemes !heir
risk and return levels are medium
Li0uidity: !hese are primarily invested in money market instruments and thus most volatile,
safer and give lower returns !hese funds are also known as cash or money market funds
In addition to the above type there are other derivative classes as listed below
This ty.e of fund111 In+est in this area
)a&anced fund Is an investment blend of e"uity and dept
Instruments
Inde2 fund Invests in the companies that participate in stock market
indices in the same weight age comprising of an index
(ector fund Invests in companies pertaining to specific sectors like
health care, banking, FM<@, technology etc
E&&s 3 Ta2 funds Invests is @overnment bonds and generally long term in
nature !hey provide tax benefits
D
!hese are called mutual fund schemes It is based on the investment ob'ective !here is another
<lassification based on the capitali#ation of funds If the fund offers purchase or selling on a
<ontinuous basis it is called open ended mutual fund $n the contrary, if the fund is open only for
a particular period, it is called closed ended fund
Differences: O.en ended and C&osed ended funds
(.$ Feature $pen ended <losed ended
1 <apitali#ation Enlimited 8imited
% /ny time entry Bes .o
- /ny time exit Bes .o
3 !ax advantage Bes .o
+ /vailable for a fixed period .o
0with exemption of
FMP schemes1
Bes
> 8isted on the exchange @enerally .o Bes
$pen ended funds gained popularity because of their flexibility and variety of features they offer
For this reason, ma'ority of the mutual funds are Fopen= in nature
Arms of a mutua& fund:
Primarily mutual fund is formed as a trust by a group of sponsors !hey are the owners of the
mutual funds and forms trust by a group of sponsors !hey are the owners of the mutual funds and
forms trustees who in turn appoint /M< and manage the mutual fund
()?I regulations re"uire that at least two at least two thirds of the directors of trustee company or
board of trustees must be independent ie they should not be associated with the sponsors /lso,
1,
+,G of the directors of /M< must be independent /ll mutual funds are re"uired to be registered
with ()?I before they launch any scheme
This entity4 Does this4
(.onsor Forms $f as a trust1 Re5isters ith
(E)I1
Trustees ,o&ds funds in+ested in a form of units1
Ensure com.&iance ith (E)I1 A..oints
A$C
Asset mana5ement com.any F&oats $F (chemes6 $ana5es funds and
cash1
Re5istrar ,o&ds in+estor data1 Do ser+ices to
in+estors
Distri7utors $ar-et +arious schemes of $F
Transaction ty.es !commercia& 8 non9commercia&":
8et=s compare various transactions of mutual funds with those of banks
In a 7an-6 you i&&4 In a mutua& fund4
O.en an account ith initia& de.osit :ou su7scri7e in a scheme and 7uy units
De.osit money Do additiona& .urchases
%ith dra money :ou redeem units
O.t for a recurrin5 de.osit (tart a systematic in+estment .&an
(ince mutual fund offers many more options to investors, it will have many more transaction
types as well 8et us see some popular transactions in mutual funds
(NO1 Transaction Descri.tion
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;1 Ne .urchase Ne in+estment1 )uyin5
units in a scheme
<1 Additiona& .urchase )uyin5 additiona& units in
a scheme
=1 Redem.tion (e&&in5 units and 5ettin5
money 7ac-1
>1 (itch3shift Transferrin5 in+estment
from one scheme to other1
?1 Di+idend %hen A$C announces
di+idend in a scheme1
@1 (ystematic in+estment In+estin5 fi2ed amounts
.eriodica&&y &i-e a
recurrin5 de.osit1
A1 (ystematic ith dra& Re+erse of systematic
in+estment (e&&in5 units
.eriodica&&y
*est are relating to general maintenance only (o they are non-commercial transactions
Net asset +a&ue:
/s you must have noticed, we always talk about =units= in a mutual fund and not money itself /
unit is basic measure of investment n a mutual fund
)ach scheme 6 plan will have a different market value is called the .et asset value or simply
./2 (ince market value of the underlying securities changes every day, ./2 of a scheme also
varies on a day to day basis
1%
NAV = Total assets Total liabilities/Number of units
(E)I /uide&ines on Ne Fund Offer:
;1 Procedure for &aunchin5 of schemes:
!;" .o scheme shall be launched by the asset management company unless such scheme is
approved by the trustees and a copy of the offer document has been filed with the ?oard
!<" )very mutual fund shall along with the offer document of each scheme pay filing fees as
specified in the (econd (chedule
<1 Disc&osures in the offer document:
!;" !he offer document shall contain disclosures which are ade"uate in order to enable the
investors to make informed investment decision Hincluding the disclosure on maximum
investments proposed to be made by the scheme in the listed securities of the group companies of
the sponsorI
!<" !he ?oard may in the interest of investors re"uire the asset management company to carry out
such modifications in the offer document as it deems fit
!=" In case no modifications are suggested by the ?oard in the offer document within %1
HworkingI days from the date of filing, the asset management company may issue the offer
document
!>" .o one shall issue any form of application for units of a mutual fund unless the form is
accompanied by the memorandum containing such information as may be specified by the ?oard
=1 Ad+ertisement materia&:
!;" /dvertisements in respect of every scheme shall be in conformity with the /dvertisement
<ode as specified in the (ixth (chedule and shall be submitted to the ?oard within A days from
the date of issue
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!<" !he advertisement for each scheme shall disclose Hinvestment ob'ective for each schemeI
>1 $is&eadin5 statements:
!he offer document and advertisement materials shall not be misleading or contain any statement
or opinion, which are incorrect or false
?1 Listin5 of c&ose ended schemes:
)very close ended scheme shall be listed in a recogni#ed stock exchange within six months from
the closure of the subscription Provided that listing of close ended scheme shall not be mandatory
!a" If the said scheme provides for periodic repurchase facility to all the unit holders with
restriction, if any, on the extent of such repurchaseJ or
!7" if the said scheme provides for monthly income or caters to special classes of persons like
senior citi#ens, women, children, widows or physically handicapped or any special class of
persons providing for repurchase of units at regular intervalsJ or
!c" If the details of such repurchase facility are clearly disclosed in the offer documentJ or
!d" If the said scheme opens for repurchase within a period of six months from the closure of
subscription
@1 Re.urchase of c&ose ended scheme:
!;" !he asset management company may at its option repurchase or reissue the repurchased units
of a close ended scheme
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!<" !he units of close ended schemes referred to in the proviso to regulation may be open for sale
or redemption at fixed pre-determined intervals if the maximum and minimum amount of sale or
redemption of the units and the periodicity of such sale or redemption has been disclosed in the
offer document
!=" !he units of close ended scheme may be converted into open ended scheme
!a" If the offer document of such scheme discloses the option and the period of such conversionJ
or
!7" !he unit holders are provided with an option to redeem their units in full
!>" / close ended scheme shall be fully redeemed at the end of the maturity period HProvided that
a close ended scheme may be allowed to be rolled over if the purpose, period and other terms of
the roll over and all other material details of the scheme including the likely composition of assets
immediately before the roll over, the net assets and net asset value of the scheme, are disclosed to
the unit holders and a copy of the same has been filed with the ?oard
Provided further, that such roll over will be permitted only in case of those unit holders who
express their consent in writing and the unit holders who do not opt for the roll over or have not
given written consent shall be allowed to redeem their holdings in full at net asset value based
price
A1 Offerin5 Period:
.o scheme of a mutual fund other than the HinitialI offering period of any e"uity linked savings
schemes shall be open for subscription for more than 3+ days
B1 A&&otment of Units and refund of money:
1+
!;" !he /sset management company shall specify in the offer document
!a" !he minimum subscription amount it seeks to raise under the scheme and
!7" In case of over subscription the extent of subscription it may retain Provided that where the
asset management company retains the over subscription referred to in clause 0b1, all the
applicants applying up to five thousand units shall be given full allotment sub'ect to the
oversubscription mentioned in clause 0b1
!<" !he mutual fund and asset Management <ompany shall be liable to refund the application
money to the applicants-
!i" If the mutual fund fails to receive the minimum subscription amount referred to in clause 0a1
of sub-regulation 011J
!ii" If the moneys received from the applicants for units are in excess of subscription as referred
to in clause 0b1 of sub-regulation 011
!=" /ny amount refundable under sub-regulation 0%1 shall be refunded within a period of six
5eeks from the date of closure of subscription list, by *egistered /7 and by che"ue or 7emand
7raft marked K/6< PayeeK to the applicants
!>" In the event of failure to refund the amounts within the period specified in sub-regulation 0-1,
the asset management company shall be liable to pay interest to the applicants at a rate of fifteen
percent per annum on the expiry of six weeks from the date of closure of the subscription list
C1 Unit certificates or (tatement of Accounts:
!he asset management company shall issue to the applicant whose application has been accepted,
unit certificates or a statement of accounts specifying the number of units allotted to the applicant
1>
as soon as possible but not later than six weeks from the date of closure of the Hinitial subscription
list and or from the date of receipt of the re"uest from the unit holders in any open ended
schemeIProvided that if an applicant so desires, the asset management company shall issue the
unit certificates to the applicant within six weeks of the receipt of re"uest for the certificate
;D1 Transfer of units:
011 / unit certificate unless otherwise restricted or prohibited under the scheme, shall be freely
transferable by act of parties or by operation of law
0%1 !he asset management company shall, on production of instrument of transfer together with
relevant unit certificates, register the transfer and return the unit certificate to the transferee within
thirty days from the date of such production Provided that if the units are with the depository
such units will be transferable in accordance with the provisions of the (ecurities and )xchange
?oard of India 07epositories and Participants1 *egulations, 1DD>
;;1 Dis.atch of arrants and .roceeds:
)very mutual fund and asset management company shall,
!a" 7ispatch to the unit holders the dividend warrants within H-, daysI of the declaration of the
dividend
!7" 7ispatch the redemption or repurchase proceeds within 1, working days from the date of
redemption or repurchase
1A
!c" In the event of failure to dispatch the redemption or repurchase proceeds within the period
specified in sub-clause 0b1, the asset management company shall be liable to pay interest to the
unit holders at such rate as may be specified by ?oard for the period of such delay
!d" /side payment of such interest to the unit holders under sub-clause 0c1 the asset management
company may be liable for penalty for failure to dispatch the redemption or repurchase proceeds
within the stipulated time
5herever an application for a total value of *( +,,,,, or more, the applicant or in the case of
application in 'oint names, each of the applicants, should mention his6her permanent account
number 0P/.1 allotted under the Income !ax /ct, 1D>1 or where the same has not been allotted,
the @I* number and the income-tax <ircle65ard67istrict should be mentioned In case where
neither the P/. nor the @I* number has been allotted, the fact of non-allotment should be
mentioned in the application form /ny application form without these details should not be
accepted by the mutual fund !he above clarification is being issued in accordance with
*egulation AA of the ()?I 0Mutual Funds1 *egulations, 1DD>
;<1 Instructions for fi&in5 scheme offer document ith (E)I:
/s advised in ()?I circular MF76<I*6,>6%A+6%,,1 dated Luly D, %,,1, while filing offer
document for launching a new scheme6revising and filing existing offer document with ()?I, the
mutual funds should highlight and clearly mention the page number of the offer document on
which each of the following observation has been incorporated In case of any amendment to
*egulations, the new provisions should be incorporated in the offer documents
ANAL:ICAL FRA$E %OR#
NFO .rocess:
1C
5hen a mutual fund /ssets Management <ompany 0A$C1 announces a public issue of units of
M new fund6scheme, it is called a new fund offer 0NFO1
!he new fund is planned and sources from where it should be collected and where the amount
should be invested is planned by the /M<
/ccording to the ()?I rules any new fund launched should be approved by ()?I $nce the /M<
get the approval of ()?I for the fund it does the marketing of the fund by it self or through
brokers !he investors who are willing to invest in a particular fund deposit the amount they plan
to invest in the bank as directed by the /M<
!hese banks collect the application and amount and direct it towards the registrar specified by the
/M< From this point India info line came into the picture as the registrar
!he role, responsibilities, activities, forms and reports involved in this process of .F$ is general,
are /M<, fund manager, (IP I6c, (witches I6c, .F$ <oordinator Internal auditor, (ystems0(651
dept IP$ <entre coordinator, IP$-*!I, IP$-)7P, (canning and Printing M 7ispatching
!eams involved in the .F$ process9
Mutual fund unit
!echnology team
7ata entry team
2erification team
)xternal audit team
(canning team
Franking and dispatching team
1D
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Descri.tion of NFO .rocess:
)an- ise se5re5ation:
!he India info line branches collect the applications of the investors across India and abroad for
all the branches of the bank that is involved in this .F$ !hese applications are sent to India info
line processing center, &yderabad /fter receiving, these applications are segregated bank wise
and branch wise
I, Num7erin5:
I& numbering is also called as In house .umbering India info line gives this I& numbering to
those applications !his is done for their convenience in doing back office functions easily /ll
the data on the application is entered into systems through software developed by India info line
technology team called N-?olt 8ater on, we can get any information of a particular application
or investor that we re"uire by entering this I& number
)indin5:
/ll the applications that are received are given for binding ?inding of application is done by
segregating them according to the bank and branch fro which they are received India info line
does this ?inding because to keep all these applications safe, out of any damage and miss-place
First Entry:
/fter finishing binding of applications they are sent to 7ate )ntry team &ere the first time entry
is done /ll the information or date of an investor that is available on the application like name of
the applicant, age, /ddress, P/., ?ank details, broker code, sub broker code, email addresses,
guardian name, amount invested, name of the scheme or plan invested in, etc, are entered into the
systems of India info line
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(econd Entry:
/fter first entry the data is again sent for the second entry &ere in second entry, the data that is
entered in first entry is checked and the information what ever is missing is entered
On&ine $atchin5:
/fter entering the data like applicant, age, /ddress, P/., ?ank details, broker code, sub broker
code, email addresses, guardian name, amount invested, name of the scheme or plan invested in,
etc, in the first entry and once again in the second entry it is sent to the online matching &ere in
online matching the physical form of application are kept side by an checking of data that was
entered in the first entry and second entry is done
First time +erification:
7ata from online matching is sent to the verification team !his team verifies mistakes that are
left in online matching Mistakes like blank address, P/. blank for amount greater than or e"ual
to +,,,, *( .ame blank, bank details blank, invalid or blank broker code etc, are rectified in
the first time verification
First time CCL:
First time check clearing list is in short is called as first time <<8 First !ime <<8 is prepared
based on the data that is provided after first time verification
E2terna& Audit:
First time check-clearing list is sent to an external audit team India info line appoints this team
before the .F$ processes !hey are nowhere related to the organi#ation !his external audit team
%3
will mainly check name of the investor, amount invested, bank details P/. number, name of the
scheme6plan and mode of holding 0M$&1 ?ut in total they will check more than -, characters
(econd time +erification:
If the external auditing is not satisfied and if they find any mistakes or missing information they
will send the first time <<8 for second time verification &ere they verify the check list once
again and mistakes like invalid mode of folding 0M$&1, invalid email address, status minor
without guardian name, invalid date of birth for minor, invalid existing account number,
blank6null application number, .*I with blank account type, saving or current, investor signature
missing are rectified
(econd time CCL:
(econd check the verification team prepares clearing after verifying the mistakes that are pointed
out by the external audit team /fter preparing second time <<8 it is again sent to external audit
team
Inte5rity Chec- !NFO team":
<heck clearing list will be given by the external audit team to the .F$ team in India info line
!his .F$ team in India info line will once again check further mistakes like spelling mistakes in
the name of the applicant etc, and rectify them
Inte5rity Chec- !7y Audit":
/fter integrity check by the .F$ team it is once checked by the internal audit team of India info
line
%+
(cannin5 Defau&t Va&ues6 Verification of $ismatch cases:
)ntire data is filtered at each and every step and finally it is given to the scanning team for
scanning here scanning team will detect and rectify any further default values and mismatch
cases
Reconci&iation6 ReEections and Che0ue returns:
<he"ues of the investors are sent are sent by the balk to India info line *econciliation team &ere
this team will verify bank details of the investor like P/. number, bank a6c number, comparing
the amount invested with that of the minimum amount that has to be invested che"ues with out
hue signature of the investor bounced che"ues etc, and they are re'ected !hese re'ected che"ues
are dispatched to the investors / sample statement of accounts 0($/1 is prepared by this
reconciliation team
,and&in5 o+er the data to $F(:
)ntire data after getting filtered at each and every step will be handing over to mutual fund
services team !his MF( team will once again verify the data and the final data will come out any
mistakes and default values
Portin5 in Tas- $F:
!ask MF is the software developed by India info line !echnology team It is prepared according
to the suggestion given by /M< !his !ask MF will resemble the style or Performa or outlook of
the statement of accounts Final data that they got after filtering the mistakes and default values is
ported in the task MF
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A&&otment of units:
/llotment of units is done as per the amount that is invested by investors !hey will avail the units
taking the .et /sset 2alue 0./21 of that particular scheme as base
(am.&e (OA +erification 7y audit:
(tatement of accounts 0($/1 is picked up randomly from a huge lot and the audit team does
verification !his verification will result in preparing a statement of accounts which in cent
percent correct and exact
!his ($/ contains data likeO
4 .ame of the investor
4 /ddress
4 ?ank details
4 Pan .umber
4 @uardian name
4 ?roker code
4 (ub broker code
4 .ominee name
4 .ominee addresses
4 %
nd
and -
rd
applicant name
4 /mount invested
4 .o $f units allotted
4 Fund name, (cheme .ame, Plan .ame M /6c no
%A
4 !ransaction type details
4 Mode of redemption payment
4 Mode of dividend payment
4 Mode of dispatch
4 (tatus, occupation
4 <urrent balance, average price, current cost, current ./2 etc,
Dis.atch of (OA:
(tatement of accounts 0($/1 once prepared is dispatched to the investor ($/=s are neatly
packed in an envelope and dispatched to the investors by the dispatch team through courier
Ne Fund Re.ort:
India info line will finally prepare .ew Fund *eport !his new fund report has to be submitted to
the /M< !hen /M< will submit a copy of the same to the ()?I, which is mandatory !he new
fund report details like
;" (cheme details
4 (cheme name
4 (cheme type
4 7ate of opening
4 7ate of closing the scheme 6 initial subscription period
4 !arget amount
4 Minimum amount to be raised
<" (ubscription 6 /llotment details
4 .umber of applications received with in the country
%C
4 .umber of .*I applications received
4 (ubscription amount received with in the country
4 (ubscription amount received form .*I
4 7ate of allotment of units
=" Initial issue expenses
>" 7ate of dispatch of refund of refund orders
?" Enit holding pattern
@" 7istribution schedule
A" @eographical 7ispersion list
CO$PAN: PROFILE:
<irca1DD+ / group of professional formed a company called Probity *esearch M (ervices
Pvt 8td !he name was later changed to India Info line 8td !he $b'ective was to provide
unbiased and independent information to market intermediaries and investors !he "uality of
research soon caught the imagination of all ma'or participants in the financial market In a span of
% to - years the client list read like the who=s who of Indian Financial market !he list included
consulting firms like Mc Ninsey, companies like &industan 8ever, ?anks like <itibank, *ating
agencies like <*I(I8, 7M?, FI(, foreign brokers as well as leading Indian brokers
$ne fine morning in early 1DDD, a colleague had a cra#y idea that if the company made all
the research available free on the web, the number of users may well 'ump from %+, to %+
million !o make it true, the business re"uired a reincarnation /nd the pre-re"uisite was a death
It meant that the company put up all the information free on the website and let go of all the
revenues and profits 5orse, if the new avatar failed, there would be Fno comebacks=
%D
!he company became heavily dependent on its e-broking business for survival !he odds
were against them !here was no money available from the private e"uity investors at any
valuation !he core promoters of the company had little experience of broking !o add to it, the
market was hit by a scam !hey also had their share of price to pay and lessons to learn It was
difficult to retain people /lthough devastating for morale, but not surprising, most market
observers had written them off
!here was a core group who never lost hope !hey cut all possible costs and worked on a bare
bones structure !hey survived against all odds and started capturing market share !he company
rose from strength to strength to become the leading corporate agent in life insurance and among
the top retail players in mutual fund and broking space
Our #ey $i&estones:
Incorporated on $ctober 1C, 1DD+ as Pro7ity Research 8 (er+ices1
8aunched Internet portal 1indianinfo&ine1com in May 1DDD
<ommenced distribution of personal financial products like Mutual Funds and *?I ?onds
in /pril %,,,
8aunched online trading in shares and securities branded as 1?.aisa1com in Luly
%,,,
(tarted life insurance agency business in 7ecember %,,, as a <orporate /gent of I<I<I
Prudential 8ife Insurance
?ecame a depository participant of .(78 in (eptember %,,1
8aunched stock messaging service in May %,,-
/c"uired commodities broking license in March %,,3
-,
8aunched portfolio management services in /ugust %,,3
8isted on N(E and )(E on May 1A, %,,+
/c"uired A+G stake holding in Money tree <onsultancy services, which is a distributor of
Mortgages and other 8oan products, in $ctober %,,+
/c"uired 1,,G e"uity of March Mont <apital /dvisors Pvt 8td in 7ecember %,,+
through which we have ventured into Merchant ?anking
7(P Merrill 8ynch <apital subscribed to convertible bonds aggregating *sC,crores in
7ecember %,,+ !heir current stake in India Info 8ine is a little over 13 G as on -1
st
March %,,A
?ennett <oleman M <o 8td 0?<<81 invested *s%,crores in India Info line by way of
preferential allotment in 7ecember %,,+
?ecame a depository participant of <7(8 in Lune %,,>
Merger of India Info line (ecurities Private 8imited with India Info line 8imited in
Lanuary %,,A
)ntered into an alliance with ?ank of ?aroda for ?aroda e-trading in February %,,A
I*7/ license for Insurance ?roking /pril %,,A
Our $ana5ement Team:
$r1Nirma& Fain !Chairman and $ana5in5 Director"
.irmal Lain is the founder and <hairman of India Info line 8td
&e holds an M?/ degree from IIM /hmedabad, and is a <hartered /ccountant 0/ll
India *ank %1 and a <ost /ccountant
-1
$r1 R1Ven-ataraman !E2ecuti+e Director"
* 2enkataraman is the co-promoter and )xecutive 7irector of IndiaInfoline 8td
&e holds a ? tech degree in )lectronics and )lectrical <ommunications )ngineering
from II! Nharagpur and an M?/ degree from IIM ?angalore
&e has held the position of /ssistant 2ice President with @ ) <apital (ervices India
8imited in their private e"uity division
The )oard of Directors:
$r1 (at Pa& #hattar !Non E2ecuti+e Director"
Mr (at Pal Nhattar 'oined the ?oard with effect from /pril %,, %,,1
Mr (at Pal Nhattar is a lawyer by profession
&e is a director of a number of public companies in (ingapore and India
$r1 (anEi+ AhuEa !Inde.endent Director"
Mr (an'iv /hu'a 'oined the ?oard with effect from /ugust %C, %,,%
Mr /hu'a graduated from .ational Eniversity of (ingapore with a degree in <omputer
(cience and is also a <ertified Public /ccountant
&e started his own investment advisory and consulting company in %,,1, named
<entennial Management <onsultants Private 8imited
-%
$r1 Ni&esh Vi-amsey !Inde.endent Director"
Mr .ilesh (hiv'i 2ikamsey 'oined the ?oard with effect from February 11, %,,+
Mr 2ikamsey "ualified as a <hartered /ccountant in 1DC+ and has been a member of the
Institute of <hartered /ccountants of India since 1DC+
$r1 #ranti (inha !Inde.endent Director"
Mr Nranti (inha 'oined the ?oard with effect from Lanuary %A, %,,+
Mr (inha graduated from the /gra Eniversity with a Masters degree
Mr (inha is also on the ?oard of 7irectors of &industan Motors 8imited, 8arsen M !urbo
8imited M 8I<&F8 <are &omes 8imited
Our Vision:
Its vision will not be accomplished only by maintaining high growth alone $ur vision is to
emerge as the most respected financial services company in India .eedless to emphasi#e that it is
imperative for all us to align our personal goals and values to this vision
#no&ed5e:
/lways keep yourself up-to-date by reading newspapers like )conomics !imes, ?usiness
standard and ?usiness 8ine daily Passing .<FM, /MFI, I*7/ exams also help you to
get basic domain understanding
--
5e are in a knowledge industry and hence we cannot afford to go to a client and appear
ignorant and foolish by not even knowing basic things
Techno&o5y:
?y technology, we mean that as an organi#ation, we leverage technology to deliver best
service to our clients at the least cost
$ur trading interface for broking is absolutely world class
5e expect our employees to be comfortable with and confident of using technology
(er+ice:
$ur customer service is warm, friendly and responsive that media cannot help but rave
about !oday, service is the key driver for growth in financial services 5e take pride in
our ability to add value that our customers can feel and appreciate
*emember we have to always ensure that simple things like ensuring customer problems
are solved, re"uests are catered to, giving him investment ideas etc ?asically, whatever it
takes to keep him served
-3
O)FECTIVE(
-+
O)FECTIVE( OF T,E (TUD:
4 !o study the technical, procedural, legal dimensions of the .F$
4 !o examine briefly the organi#ational structure, communication network,
resource re"uirements to launch a new fund
4 !o study a sample of application drawn from *eliance Mutual Fund
->
RE(EARC, $ET,ODOLO/:
-A
RE(EARC, $ET,ODOLO/:
$ethodo&o5y of study:
!o fulfill the ob'ective of the study both primary and secondary data has been collected Primary
data is the data collected specifically for the study 7ata is collected directly from people and
organi#ations via "uestionnaires or surveys before being analy#ed to reach conclusions
concerning the issues covered in the "uestionnaire or survey
In this study primary data was collected through interaction with staff of India info &ine P+t Ltd1
and the applications of *eliance e"uity fund
(econdary data is the data collected previously by someone else for some other purpose which
can be analy#ed and interpreted according to re"uirements For example, sources of secondary
data are government publications, newspapers, worldwide web etc
In this study the (econdary data is mainly taken from
4 !he company=s training material
4 *econciliation statements
4 $ther documents generated with in the organi#ation
5hich have to /ccessP
G www indiainfolinecom, wwwamfiindiacom,wwwsebicom
Ty.e of Research
*esearch methodology is a way to systematic solve the research problem It is a procedure, which
is followed step by step to solve a particular research problem !here are basically four types of
researches
-C
)QP8$*/!I2) *)()/*<&
7)(<*IP!I2) *)()/*<&
7I/@.$(!I< *)()/*<&
&BP$!&)(I( !)(!I.@ *)()/*<&
E2.&orati+e Research
!o gain familiarity with the phenomenon or to achieve an insight into it
Descri.ti+e Research
!o poetry accurately the characteristic of the particular individual situation or a group
Dia5nostic Research
!o determine the fre"uency with which something occurs or with which it is associate with
something else
,y.othesis Testin5 Research1
!o test a hypothesis of casual relationship between variables
!he present pro'ect is 7escriptive in nature It is done to poetry accurately the characteristic of a
particular individual situation or a group !he ma'or purpose is descriptive research is the
description of the state of the affairs as it exits at presents !he main characteristics of this method
are that the researcher has no control over the variablesJ he can only report what has happened or
what is happening
(tatement of research .ro7&em
/ research problem, refers to some difficulty which a researcher experiences in the context of
either a theoretical or practical situation and wants to obtain a solution for the same
-D
&ere the research problem is mutual funds
(tatement of research o7Eecti+es
It aims at getting an insight in to *etail loan It also aims at familiari#ed with the customer during
the market survey help me a lot in understanding the practical aspect of the loan as a whole
!o know the awareness among the common man about loan which they want to take
RE(EARC, DE(I/N AND $ET,ODOLO/:
*esearch is a systemic and ob'ective process of gathering recording and anay#ing data for aid of
making decision regarding a particular problem
RE(EARC, DE(I/N
!he research design is a master plan specifying the methods and procedures for collecting and
analy#ing the needed information the research design of my dissertation is
DE(CRIPTIVE RE(EARC,
7escriptive research includes surveys and facts findings in"uiries of different kinds
RE(EARC, IN(TRU$ENT(
RE)(!I$../I*)
(A$PLE DE(I/N
target population people of industries
sample si#e 1,, people
3,
(ampling techni"ue convenience and 'udgmental
31
DATA ANAL:(I(
8
INTERPRETATION
3%
DATA ANAL:(I( AND INTERPRETATION
Occu.ation .rofi&e of a..&icants:
Particu&ar )usiness (er+ice (tudent Professiona& Retired ,ouseife Others Tota&
No1 of
a..&icants
=> >@ < > A <= ? ;<D
H of
a..&icants
<B =B < = @ ;C > ;DD
Inter.retation:
Ma'ority of the applicants are from services personnel at -CG, next comes business People are %CG !he
housewife occupy -
rd
highest at 1DG It is found that professionals and retired are at the lowest
(TATU(:
a" Residentia& status of indi+idua& a..&icants :
3-
28
38
2
3
6
19
4
0
5
10
15
20
25
30
35
40
B
u
s
i
n
e
s
s
S
e
r
v
i
c
e
S
t
u
d
e
n
t
P
r
o
f
e
s
s
i
o
n
a
l
R
e
t
i
r
e
d
H
o
u
s
e
w
i
f
e
O
t
h
e
r
s
Occupation
%

o
f

a
p
p
l
i
c
a
n
t
s
Particu&ars Resident NRI Tota&
No1 of a..&icants ;D> > ;DB
H of a..&icants C@ > ;DD
Inter.retation:
It can be observed from the table and the chart that the ma'ority of applicants are resident
individuals constituting D>G the applicants and remaining 3G are the .on-resident Indians
7" (tatus of non9indi+idua&s :
33
96
4
0
20
40
60
80
100
120
Resident R!
Status
%

o
f

a
p
p
l
i
c
a
n
t
s
Particu&ars Partnershi. AOP3)OI Trust ,UF F&& )an-s
No1 of a..&icants ; D D ;D D D
H of a..&icants ;D D D BD D D
Particu&ars Com.any (ociety F& ($E Others Tota&
No1 of a..&icants ; D D ;D D D
H of a..&icants ;D D D BD D D
Inter.retation:
In the non-individuals category &EF occupied the highest at C,G and next 1,G is for
partnerships In others category 1,G is found and all other non-individual entities have recorded
#ero applications
A5e .rofi&e of the a..&icants:
Particu&ars )e&o ;B ;B9=D =;9@D A7o+e @D Tota&
3+
10
0 0
80
0 0 0 0 0 0
10
0
10
20
30
40
50
60
"0
80
90
P
a
r
t
n
e
r
s
h
i
#
$
O
P
%
B
O
!
&
r
u
s
t
H
S
'
'
l
l
B
a
n
(
s
)
o
*
#
a
n
+
S
o
c
i
t
+
'
l
S
,
-
O
t
h
e
r
s
Non-indivisuals
%

o
f

a
p
p
l
i
c
a
n
t
s
No1 of
a..&icants
D =D A< ;B ;<D
H of
a..&icants
D <? @D ;? ;DD
Inter.retation:
!he age profile of the applicants shows that the ma'ority of the applicants fall into the age @roup
-1->, years and the percentage of them being >, !his is followed by the age @roup 1C--, years
and 1+G of the applicants are above >, years
In+estment .rofi&e of the a..&icants:
3>
0
25
60
15
0
10
20
30
40
50
60
"0
Below 18 18/30 31/60 $0ove 60
Age
%

o
f

a
p
p
l
i
c
a
n
t
s
Particu&ars ?DDD9
<?DDD
<?DD;9
?DDDD
?DDD;9
;DDDDD
A7o+e
;DDDDD
Tota&
No1 of a..&icants AB =< > @ ;<D
H of a..&icants @? <A = ? ;DD
Inter.retation:
/mount of investment is high at >+G in the range +,,,-%+,,, and it is very low at -G in +,,,1-
1,,,,,, but the next slab /bove 1,,,,, has registered +G

(cheme .rofi&e of a..&icants:
3A
65
2"
3
5
0
10
20
30
40
50
60
"0
5000/25000 25001/50000 50001/100000 $0ove 100000
Amount invested
%

o
f

a
p
p
l
i
c
a
n
t
s
Particu&ars /roth
o.tion
)onus
o.tion
Di+idend
rein+estment
Di+idend
.ayout
Tota&
No1 of a..&icants ?C > =A <D ;<D
H of a..&icants >C = =; ;A ;DD
Inter.retation:
Ma'ority of the applicants $pted the growth option and the option of dividend reinvestment is
-1G !his means that C,G of the applicants are not investing for income sake rather they look at
the accumulation of profits
Ana&ysis of mode of .ayment:
Particu&ars Che0ue DD Tota&
No1 of a..&icants ;;C ; ;<D
H of a..&icants CC ; ;DD
3C
49
3
31
1"
0
10
20
30
40
50
60
1rowth o#rion Bonus o#tion 2ividend reinvest*ent 2ividend #a+out
Scheme
%

o
f

a
p
p
l
i
c
a
n
t
s
99
1
0
20
40
60
80
100
120
)he3ue 22
ode of pa!ment
%

o
f

a
p
p
l
i
c
a
n
t
s
Inter.retation:
!he mode of payment reflects upon the "uality of applicants $n an average DDG have paid
through che"ues and therefore the .F$ is able to attract good "uality retail investors
Ana&ysis of ty.e of account:
Particu&ars () Current NRO NRE FCNR Tota&
No1 of
a..&icants
;;C ; D D D ;<D
H of CC ; D D D ;DD
3D
a..&icants
99
1
0 0 0
0
20
40
60
80
100
120
SB )urrent RO R- ')R
T!pe of account
%

o
f

a
p
p
l
i
c
a
n
t
s
Inter.retation:
Ma'ority of the payments have been made from (avings ?ank account 0(?11 .o payments have
been found from .*$, .*), and F<.* even though 3G of the applicants are .*I s
/ender .rofi&e of the a..&icants:
Particu&ars $a&e Fema&e Tota&
No1 of a..&icants BC =; ;<D
H of a..&icants A> <@ ;DD

+,
Inter.retation:
!he female participation in the .F$ is low at %>G !he male applicants are very high at A>G as
is not normally found in found in institutional investments
/eo5ra.hica& distri7ution of a..&icants:
Particu&ars Andhra
Pradesh
)ihar Chandi5har De&hi /uEarat #arnata-a
No1 of a..&icants > ; ; ;A ;; ?
H of a..&icants = ; ; ;> C >
+1
"4
26
0
10
20
30
40
50
60
"0
80
,ale 'e*ale
"ender
%

o
f

a
p
p
l
i
c
a
n
t
s
Particu&ars $adhya
Pradesh
$aharastra RaEasthan PunEa7 Uttar
Pradesh
Tami&nadu
No1 of a..&icants ; >B < < ? @
H of a..&icants ; >D < < > ?
Particu&ars %est )en5a& Others tota&
No1 of a..&icants ;D @ ;<D
H of a..&icants B ? ;DD
+%
3
1 1
14
9
4
1 1
40
2 2
4
5
8
5
0
5
10
15
20
25
30
35
40
45
$
n
d
h
r
a

P
r
a
d
e
s
h

B
i
h
a
r
)
h
a
n
d
i
4
h
a
r
2
e
l
h
i
1
u
5
r
a
t
6
a
r
n
a
t
a
(
a
6
e
r
i
a
,
a
d
h
+
a

P
r
a
d
e
s
h
,
a
h
a
r
a
s
h
r
a
R
a
5
a
s
t
h
a
n
P
u
n
5
a
0
7
t
t
a
r

P
r
a
d
e
s
h
&
a
*
i
l

a
d
u
8
e
s
t

B
e
n
4
a
l
O
t
h
e
r
s
States
%

o
f

a
p
p
l
i
c
a
n
t
s
Inter.retation:
/ predominant feature is that 3,G of the applications are from Maharastra and next highest 13G
is registered for 7elhi 8owest numbers of applications are from ?ihar and <handighar
FINDIN/(
+-
+3
FINDIN/(
/ predominant feature is that 3,G of the applications are from Maharastra and next
highest 13G is registered for 7elhi 8owest numbers of applications are from ?ihar and
<handighar
!he female participation in the .F$ is low at %>G !he male applicants are very high at
A>G as is not normally found in found in institutional investments
Ma'ority of the payments have been made from (avings ?ank account 0(?11 .o payments
have been found from .*$, .*), and F<.* even though 3G of the applicants are .*I s
!he mode of payment reflects upon the "uality of applicants $n an average DDG have
paid through che"ues and therefore the .F$ is able to attract good "uality retail investors
Ma'ority of the applicants $pted the growth option and the option of dividend
reinvestment is -1G !his means that C,G of the applicants are not investing for income
sake rather they look at the accumulation of profits
/mount of investment is high at >+G in the range +,,,-%+,,, and it is very low at -G in
+,,,1-1,,,,,, but the next slab /bove 1,,,,, has registered +G
!he age profile of the applicants shows that the ma'ority of the applicants fall into the age
@roup -1->, years and the percentage of them being >, !his is followed by the age
@roup 1C--, years and 1+G of the applicants are above >, years
In the non-individuals category &EF occupied the highest at C,G and next 1,G is for
partnerships In others category 1,G is found and all other non-individual entities have
recorded #ero applications
++
It can be observed from the table and the chart that the ma'ority of applicants are resident
individuals constituting D>G the applicants and remaining 3G are the .on-resident
Indians
Ma'ority of the applicants are from services personnel at -CG, next comes business People
are %CG !he housewife occupy -
rd
highest at 1DG It is found that professionals and
retired are at the lowest
+>
CONCLU(ION
+A
CONCLU(ION
# !he .F$ is found to be a complex activity calling for creating an organi#ation polling
the knowledge and expertise of people in different areas
4 !he .F$ process is simple and well structured as long as it is to investor to investor,
but thereafter the process is lengthy time consuming and found to be overlapping at
some stages
4 !he ()?I regulations governing .F$ are comprehensive and protect investorSs
interest at each level
4 7ifferent funds have been designing different forms of applications for .F$
4 /n analysis of sample of applications revealed the following
$ Ma'ority applicants prefer to hold the units individually
$ Ma'ority of the applicants are in service
$ .*I s share is about 3G of the total
$ More than %6-
rd
of the applicants are &EF s
$ !he model age group is -1->,
$ !he most common investment amount is +,,,-%+,,,
$ /bout half of the applicants prefer @rowth option
$ /lmost all applicants make the payments by che"ues
$ !here were no .*$, .*) and F<.* accounts
$ Ma'ority the applicants are male, and
$ Ma'ority applications are from state of Maharastra
+C
RECO$$ENDATION(
+D
RECO$$ANDATION(
* 7ifferent funds have been using different forms of applications / standardi#ed form of
application maybe designed by the competent authority and should be made mandatory
for all funds to use the standard application form
G !he .F$ process is very complex and there is a need to simplify the process by
eliminating certain unnecessary steps in the process ie instead of carrying out audit for
three times and appropriate internal check system maybe devised to keep the errors
within the tolerance limits
G !he .*I subscribers to the fund maybe encouraged to make the payments from .*$,
.*) and F<.* accounts
G !he application from institutional investors and foreign institutional investors are to be
encouraged through a package of incentives
4 !he participation of senior citi#ens in the .F$ s may be encouraged as they are likely
to hold more surpluses compared to others
4 !he holding of units in 'oint names shall be encouraged
4 !here is a need to investigate the reasons for &EF s occupying more than %6-
rd
share in
the non-individual applications as its not a body corporate
4 / savings from all channels of India 6 5orld are to be tapped by the .F$ rather than
one or two states applying for a loin share of the option
>,
)I)LIO/RAP,:
>1
)I)LIO/RAP,:
)i7&io5ra.hy
4 wwwIndiainfolinecom
4 wwwsebicom
4 wwwamfiindiacom
4 .F$ propeller of India info line
4 .F$ records of *eliance Mutual Fund
4 Mutual Funds in India by & (/7&/N
>%
IUE(TIONNAIRE

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;1 ARE :OU INTERE(TED IN $UTUAL FUND(
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<1 %,AT I( :OUR A/E /ROUP
0/1%+--+
0?1-+-3+
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=1 %,AT I( :OUR OCCUPATION
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?1 %,AT PERCENT OF RETURN DO :OU EJPECT
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0/1B)(
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0?1L M FI./.<I/8
0<1F)7I8I!B ME!E/8 FE.7(
071&(?<
;D1 DO :OU ADVICE PEOPLE TO INVE(T IN $UTUAL FUND(
0/1B)(
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