1.

INTRODUCTION
Normally investment is nothing but the saving done by the people for their future needs and
wants.

The invest in

• Physical Assets or
• Financial Assets.

Physical Assets

It constitutes Gold and Real Estate

Gold

It has essentially ornamental value; It comes really handy only when currencies crash; It requires
high emotional detachment to sell.

Real Estate

It is having highly variable growth prospects; It requires high investment; In it patterns of booms
and slumps are tough to figure out; It has too many documentation hassles.

Financial Assets

It constitutes the shares, government bonds, PPF, Bank FD’s or saving bank accounts, mutual
fund. All these are dependent on risk, return and the liquidity they offer to the customers. A lot
of thought can be made on mutual funds. Under this study I can have best knowledge of mutual
fund sector.

1
 OBJECTIVES

• To understand the need of customers

This is the main aim of my project that I have to study the need analysis adopted by
Sharekhan Ltd. to attract more number of customers. The need is the main thing while
investing in any kind of investment. So I have to consider various factors of investment
like Age, Income, and Preference towards any specific scheme.
• To make awareness about mutual funds
In the process of completing the project I have to make the awareness amongst the people
about the mutual fund schemes i.e. Equity, Balanced or Debt schemes.
• To analyze the customer’s preference towards investment i.e. equity,
debt or balanced funds
While studying the need analysis adopted by Sharekhan Ltd. I also have to study the
customer’s preference towards any specific scheme i.e. he is interested in which scheme
to invest his money.

2
 LIMITATIONS

While completing this project I suffer from some limitations.

 Wrong mind set about Mutual Funds: The people in the Nanded city have a

wrong Mind set about the Mutual Funds as the money of it is invested in Share market so

that they may face losses in investing mutual funds as the Share market is having

negative impact on their mind. So that they do not want to invest their money in the

mutual funds.

 Lack of awareness: There is a lack of awareness as well as lack of proper knowledge

about mutual funds in people of Nanded city They are not ready to invest their money in

mutual funds due to improper knowledge.

 Lack of Money: This is one of the biggest limitations for investing in mutual funds

from a customer because some customers always gave the reasons of not having

sufficient money to invest in the mutual funds. Because they invest their money in

Insurance, bank deposits etc.

3
 1.2 RESEARCH METHODOLOGY
This thesis is a Descriptive type of the thesis. In this thesis I considered only the part of need
analysis, and I also studied the topic of my Management Thesis from angle of 360 degree. This
project comes under the Formal Research in which objectives are clearly defined and where
researcher gathers whole information about all aspects of the project. There is a formal
procedure to conduct research; I followed following steps of methodology to conduct the
research.

I used following methodology & data sources for my thesis

1) Identify the Problem: While completing my thesis I find out the topic of my thesis.
Then I find out that what are the problems are there to complete it.
2) Planning the research design: After identifying the problems of my thesis I
planned my all work properly and from that I made my way to complete my Management
Thesis.
3) Selecting the research Method: Once I made planning, I select my research
method i.e. my project is of descriptive type. In this I have to study the need analysis
done by Sharekhan i.e. how Sharekhan is doing all the work while giving any scheme to
the customer.
4) Selecting the Sampling procedure: As I have to study the need analysis and its
impact on the sale of Sharekhan’s mutual fund products I have to interviewed some
people related to Sharekhan, so it is not possible for me to interviewed all people in the
Nanded city. So, I decided to choose the Simple Random Method for my thesis.
5) Data Collection: As my thesis is a descriptive one for completing the thesis, I have to
interview some people and have to collect the data from those persons. So, for that
purpose I have collected the data from near about 200 people in the Nanded city.
6) Evaluating the Data: After collecting the data I have to evaluate the data and to
draw the conclusions for getting the specific answers.

4
 7) Preparing the research report: At last after all the above steps and evaluating the
collected data and getting the specific answers I prepared the Research report and submit
it to my Faculty Supervisor.
I made the objectives for my Management thesis that, what I have to learn from that project and
what I have to find out.

After preparing the objectives I prepared the relevant questionnaire suitable for my topic and
from which I am able to collect the primary data.

After preparing the questionnaire which is suitable for collecting the primary data I tried to
collect the data from the Secondary data also, by using the Internet, Research Papers, pamphlets
and the broachers of the company information.

I analyze the collected data by using the MS-Excel Sheet and MS-Word. I also used the various
tools and the techniques to complete my project report.

After collecting the data and using the various tools and the techniques I drawn the conclusion
and prepare the final report of my Management Thesis and submitted it to my Faculty Supervisor
Dr. U. B. Dubey.

Sources of Information

While collecting the data for my thesis I used two types of Sources:

Primary sources

The Primary data means that the data is collected by the person by himself.

In this, data is collected directly from respondents using questionnaire, direct observation &
interview techniques. So for this purpose I visited 200 people in the Nanded city. I interviewed
them and asked them various questions related to my thesis and try to find out the actual result.

Secondary sources

5
The secondary data is that type of data that is not collected by the actual person. This type of the
data is already existed in the form of Internet, Research report, Journals, websites, books and
also the pamphlets, and the broachers made by the company for their advertisement, etc.

2. MUTUAL FUND
Definition of mutual funds

A mutual fund is a pool of money, collected from investors, and is invested according to certain
investment objectives. OR
Mutual Funds are a large pool of resources which are invested by professionals (fund managers)
in a portfolio, to optimize the returns for a given level of risk.

Important Phases of Mutual Funds in India

The history of mutual funds in India can be divided into 5 important phases:
a. 1963-1987: The Unit Trust of India was the sole player in the industry. Created by an
Act of Parliament in 1963, UTI launches its first product, the Unit Scheme 1964, which
is even today the single largest mutual fund scheme. UTI created a number of products
such as monthly income plans, children’s plans, equity-oriented schemes and offshore
funds during this period. UTI managed assets of Rs.6700 Crore at the end of this phase.

b. 1987-1993: In 1987 public sector banks and financial institutions entered in the mutual
fund industry. SBI mutual fund was the first non-UTI fund to be set up in 1987.
Significant shift of investors from deposits to mutual fund industry happened during this
period. Most funds were growth-oriented closed-ended funds. By the end of this period,
assets under UTI’s management grow to Rs.38, 247 Crore and public sector funds
managed Rs.8750 Crore.

c. 1993-1996: In 1993, the mutual fund industry was open to private sector players, both
Indian and foreign. SEBI’s first set of regulations for the industry were formulated in
1993, and substantially revised in 1996. Significant innovations in serving, product

6
 design and information disclosure happened in this phase, mostly initiated by private
sector players.
d. 1996-1999: The implementation of new SEBI regulations and the restructuring of the
mutual fund industry led to rapid asset growth, Bank mutual funds were re-cast according
to the SEBI recommended structure, and UTI came under voluntary SEBI supervision.

e. 1999-2002: This phase was marked by very rapid growth in the industry, and
significant increase in market shares of private sector players. Assets crossed
Rs.1, 00,000 Crores. The tax break offered to mutual funds in 1999 created arbitrage
opportunities for a number of institutional players. Bond funds and liquid funds
registered the highest growth in this period, accounting for nearly 60% of the assets.
UTI’s share of the industry dropped to nearly 50%.

7
 2.1 ADVANTAGES AND DISADVANTAGES
Advantages

1. Professional management:
You avail of the services of experienced and skilled professionals who are backed by a
dedicated research team which analyses the performance and prospects of companies and
selects suitable investments to achieve the objectives of the scheme.
2. Diversification:
Mutual funds invest in a number of companies across a broad cross section of industries and
sectors. This diversification reduces the risk because seldom do all stocks decline at the
same time and in the same proportion. You achieve this diversification through a Mutual
Fund with less money than you can do on your own.
3. Convenient Administration:
Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as
bad deliveries, delayed payments and unnecessary follow up with brokers and companies.
Mutual Funds save your time and make investing easy and convenient.

4. Return Potential:
Over a medium to long term, Mutual Funds have the potential to provide a higher return as
they invest in a diversified basket of selected securities.
5. Low costs:
Mutual funds are a relatively less expensive way to invest compared to directly investing in
the capital markets because the benefits of scale in brokerage, custodial and other fees
translate into lower costs for investors.
6. Liquidity:
In open-ended schemes, you can get your money back promptly at Net Asset Value (NAV)
related prices from the Mutual Fund itself. With close-ended schemes, you can sell your

8
 units on a stock exchange at the prevailing market price or avail of the facility of repurchase
through Mutual Funds at NAV related prices which some close-ended and interval schemes
offer you periodically.
7. Transparency:
You get regular information on the value of your investment in addition to disclosure on the
specific investments made by your scheme, the proportion invested in each class of assets
and the fund manager’s investment strategy and outlook.
8. Flexibility:
Through features such as Systematic Investment Plan (SIP), Systematic Withdrawal Plan
(SWP) and dividend reinvestment plans, you can systematically invest or withdraw funds
according to your needs and convenience.
9. Choice of Schemes:
Mutual Fund offer a variety of schemes to suit your varying needs over a lifetime.
10. Well Regulated:
All Mutual Funds are registered with SEBI and they function within the provisions of strict
regulations designed to protect the interests of the investors. The operations of Mutual Funds
are regularly monitored by SEBI.

9
Disadvantages

1. No control over costs: Since investors do not directly monitor the fund’s operations
they cannot control the costs effectively. Regulators therefore usually limit the expenses
of mutual funds.
2. No tailor-made portfolios: Mutual fund portfolios are created and marketed by
AMCs, into which investors invest. They cannot create tailor made portfolios.
3. Managing a portfolio of funds: As the number of mutual funds increases, in order
to tailor a portfolio for him, an investor may be holding a portfolio of funds, with the
costs of monitoring them and using them, being incurred by him.

10
 2.2 TYPES OF MUTUAL FUNDS
Mutual funds can be open ended or closed end,

• In an open-ended fund, sale and repurchase of units happen on a continuous basis, at

NAV related prices, from the fund itself.
• The corpus of open-ended funds, therefore, changes every day.
• A closed-end fund offers units for sale only in the NFO. It is then listed in the market.
• Investors wanting to buy or sell the units have to do so in the stock markets. Usually
closed-end funds sell at a discount to NAV.
• The corpus of a closed-end fund remains unchanged.

There are also sub-types of mutual funds like

1. Equity Funds
 Total amount of money is invested in share market.
 Long term investment
 High risk ,High return

2. Balance Funds
 Total amount of money is invested in Equity and debt market
 Ratio will be 50-50 or 60-40 (depend upon type of fund)
 Medium risk , Medium returns

3. Debt Funds
 Total amount of money invested in Govt. securities like FD, CP.

11
  Suitable for senior citizen.
 Low risk, Low return

3. INDUSTRY PROFILE
Worldwide Mutual Fund or Unit Trust as it is referred to in some parts of the world, has a long
and successful history. The popularity of mutual funds has increased manifold in developed
financial markets, like the United States. As at the end of March 2008, in the US alone there
were 8064 mutual funds with total assets of about US$11.734 trillion (Rs. 470 lakh crores).

In India the mutual fund industry started with the setting up of the erstwhile Unit Trust of India
in 1963.Public sector banks and financial institutions were allowed to to establish mutual funds
in 1987. Since 1993, private sector and foreign institutions were permitted to set up mutual
funds.

In February 2003, following the repeal of the Unit trust of India Act 1963 the erstwhile UTI was
bifurcated into two separate entities viz. The specified Undertaking of the Unit Trust of India,
representing broadly, the assets of US 64 scheme, schemes with assured returns and certain other
schemes and UTI mutual fund conforming to SEBI Mutual Fund Regulations.

As at the end of March 2008, there were 33 mutual funds, which managed assets of Rs. 5, 05,152
crores (US $ 126 Billion) under 956 schemes.

The fast growing industry is regulated by the Securities and Exchange Board of India (SEBI).

Growth of Assets (Rs. in Crores)

12
 600000

52
500000

51
50
400000

88
63
300000

32
62
18
200000

23
54
16

95
96

14
13
100000

2
8

47
02
5

68
61
45

0
13

1989 1994 1999 2004 2005 2006 2007 2008

Number of Schemes

1000 956
900
800 756
700
600 592
500
451
400 403
300 277
200 167
100
0 21
1989 1994 1999 2004 2005 2006 2007 2008

Annual Data April 2007 – March 2008

• 612 new schemes were launched during the year as against 414 in the previous year. The
amount mobilized was Rs.1, 60, 773 Crores against Rs.1, 40,298 Crores in the previous
year.
• Total Funds mobilized during the year stood at Rs.44, 64,376 Crores as against
Rs.19, 38, 592 Crores in the last year representing an increase of 130%.

13
 • Redemptions at Rs.43, 10,575 Crores were 134% higher than the redemptions of
Rs.18, 44,512 Crores in the previous year.
• On a net basis, there was an inflow of Rs.1, 53,801 Crores as compared to Rs.94, 080
Crores in the last year registering increase of 63%.
• The Assets Under Management as on March 31, 2008 stood at Rs.5, 05,152 Crores as
against Rs.3, 26, 388 Crores as at the end of the previous year, registering an increase of
55 % over the year.

Source: www.amfiindia.com

3.1 COMPANY PROFILE

Sharekhan is a firm, which is working under SSKI (S. S. Kantilal Ishwarlal Securities Ltd.).
SSKI was founded in 1922. SSKI is One of India’s Oldest Brokerage Houses Having Eight
Decades of Experience into:

• Institutional Broking
• Investment Banking
• Retail Broking

It is one of the Founding members of the Stock Exchange, Mumbai and Pioneer Institutional
Broker. SSKI Entered into Retail Broking in 1985. Share khan is the Retail Broking Arm of the
BIG 80 Years old organization i.e. of SSKI and “Sharekhan” is the Brand Name given to its
Retail Business. SSKI carries out its Retail Broking Activities under “Sharekhan” Brand
Name.

Sharekhan Outlets act as Full Service Investment Solutions Provider, providing you wide
range of services like –

• Equity & Derivatives Trading on NSE and BSE

• Online Trading

14
• Commodities Trading on MCX & NCDEX
• Portfolio Management Services
• Depository Services
• IPO Services
• Wide Range of Customized Research Products
• Uniform Service Standards
• Mutual Funds

Offerings of the Sharekhan:

Sharekhan offers both Offline and online mutual funds. But now a days it mostly concentrates
on online mutual funds through which a customer can buy it at instant from any part of the
globe trough website. It does not take into account any type of physical restriction of going to
the broker for carrying out a transaction or any type of settlement of payment. It facilitates the
customer a speedy and hassle free transaction.

Products and services offered by Sharekhan:

Sharekhan offers 2 types of mutual funds according to the requirements of the investors that
are as follows:

1) Online Selling : Through website

2) Offline Selling: Through broker or agent.

Bank Connection

15
Sharekhan has affiliation with 8 banks, which allows its customers to enjoy the facility of
instant buying of mutual funds and also online trading of share market.

• HDFC BANK
• UTI BANK
• CITI BANK
• ICICI BANK
• OBC BANK
• UNION BANK
• INDUSAND BANK
• IDBI BANK

Dial-N-Trade

It is also an exclusive service available to all Sharekhan customers for trading in shares via the
telephone. On dialing the toll free number 1800-22-7500 the customer will be directed to a tele
broker who will buy or sell shares for him.

After hour orders

Sharekhan customers also enjoy the facility of placing orders even after the trading hours, and
the orders are executed as soon as the market opens.

Trade in commodity

Sharekhan also trade in commodities like Bullion: Gold / Silver and Agricultural commodities
through Sharekhan Commodity Pvt. Ltd. which are a wholly owned subsidiary of its parent
SSKI.

16
Research team of Sharekhan

Research and in-depth knowledge of markets provide better than speculations or reacting to
rumors. Research team provides knowledge to their customers about market condition.

• In morning they provide “Eagle Eye” which tells about how the market will be
in whole day.
• In afternoon they provide “High Noon” which tells that up to that time how was
the market and what about the remaining time what will be the condition of the
market.
• After the market they analyze the market summery of the whole day and give
idea about next day market.

Mobile-N-Trade facility

Now Sharekhan is providing the facility that their customers can do trading with the help of
their mobile handset. For that purpose they have to pay some extra charge to activate that
facility.

Importance of the research to the organization

1) The organization gets the competitive information about the pricing strategy of their
competitor’s.
2) Through that they can establish their new pricing strategy to gain competitive advantage.
3) They came to know the effects of using the pricing strategy in the market.

17
 3.2 SBI MUTUAL FUND
SBI Funds Management Ltd. is the investment manager of SBI Mutual Fund. SBI Mutual Fund
has been constituted as a trust, sponsored by State Bank India. Today the Fund has an investor
base of over 2.8 million spread over 23 schemes. With a large network of collecting branches
and investor service centers, SBI Mutual Fund constantly endeavors to get closer to its growing
family of investors. SBI is the largest public sector Bank in India with 8,836 branches all over
India. SBI is the leader in providing loans to trade & industry. It also provides related services,
which generate significant fee-based income. It has also identified project finance and consumer
banking as key areas.

No. of schemes 55

No. of schemes including options 159

Equity Schemes 34

18
 Debt Schemes 97

Short term debt Schemes 11

Equity & Debt 5

Money Market 0

Gilt Fund 12

Source: www.mutualfundsindia.com

3.3 UTI MUTUAL FUND

UTI Mutual Fund is managed by UTI Asset Management Company Private Limited
(Established: Jan 14, 2003) who has been appointed by the UTI Trustee Company Private
Limited for managing the schemes of UTI Mutual Fund and the schemes transferred / migrated
from UTI Mutual Fund.

No. of schemes 108

No. of schemes including options 328

Equity Schemes 59

Debt Schemes 238

Short term debt Schemes 10

Equity & Debt 9

Money Market 0

19
 Gilt Fund 10

Source: www.mutualfundsindia.com

3.4 HDFC Mutual Fund

HDFC Asset Management Company Limited (AMC) was incorporated under the Companies
Act, 1956, on December 10, 1999, and was approved to act as an Asset Management Company
for the Mutual Fund by SEBI on June 30, 2000. The sponsor HDFC was incorporated in 1977 as
first specialized housing finance institution in India. HDFC provides financial assistance to
individuals, corporate and developers for the purchase and construction of residential housing. It
also provides property-related services, training and consultancy. In the mutual fund venture,
HDFC has tied up with Standard Life, one of the leading Insurance companies in the United
Kingdom, having vast experience in management of funds. HDFC has developed a strong and
dedicated team of agents that market its fixed deposit products. These key partners would
constitute the backbone of the marketing and distribution network of Mutual Fund and will
remain a central theme of the organizational framework in times to come.

No. of schemes 89

No. of schemes including options 363

Equity Schemes 34

20
 Debt Schemes 305

Short term debt Schemes 14

Equity & Debt 6

Money Market 0

Gilt Fund 4

Source: www.mutualfundsindia.com

3.5 ICICI Mutual Fund

ICICI Prudential Asset Management Company Ltd. is a 51:49 joint venture between ICICI Bank,
a well-known and trusted name in financial services in India and Prudential Plc, one of UK’s
largest players in the financial services sectors. ICICI Prudential Asset Management Company
Limited, in a span of just over nine years, has forged a position of preeminence in the Indian
Mutual Fund industry as one of the largest asset management companies in the country with
average assets under management of around Rs. 54321.87 Crores (as on March 31,2008)(Source:
www.amfiindia.com). The Company manages a comprehensive range of schemes to meet the
varying investment needs of its investors spread in around 265 cities in the country.

No. of schemes 137

No. of schemes including options 459

Equity Schemes 50

Debt Schemes 351

Short term debt Schemes 25

21
 Equity & Debt 10

Money Market 0

Gilt Fund 7

Source: www.mutualfundsindia.com

EMPIRICAL ANALYSIS
On the basis of raw data which I have collected for my thesis that I analyzed that most of
salaried persons are invested money in various skims like salaried employees followed by others
like college students, businessmen and house wife respectively.

Most of the people of Nanded invest money more and more in banks like F.D. then after
insurance mutual fund, share market and gold etc. Due to minimization in gold rates nowadays
only of the population is investing their money in Gold.

Most of the people prefer some fund for investment like Equity funds are the main funds who are
giving tough competition compared to balanced and debt funds in Nanded city, Share khan is
one of the fastest growing broking firms in India.
They are using various strategies to capture the market. Debt funds are also doing well in these
conditions because of continuous negative trend in the market. Balanced funds are having fewer
shares in the market
According to preferences it is observed that younger customers prefer equity funds the age of 21
to 30 and also it is found that balanced funds and debt funds are less the persons prefer those
who having age 31 to 40as compared to equity funds.

The middle aged customers are risk averse one so they are less interested towards the balanced
and debt funds rather than equity funds.

22
 FINDINGS AND SUGGESTIONS
Findings:

Analysis of customers:

32%
SalariedEmp
Businessmen
46%
HouseWife
Others

10%
12%
23
For the analysis I selected simple random sampling so in that I have selected more salaried
employees (46%) followed by others (32%) like college students, businessmen and house wife
respectively.

Choice of preference for Investment of customers:

1) People in Nanded city are not aware about the mutual funds (38%) and share market,
they also not aware about the advantages of investing money in mutual funds and share
market. So overall only 17% of the population invests their money in mutual funds and
share market also.
2) 37% of the people in the Nanded city are interested to invest their money in Bank
deposits, due to increasing rates and it is also very safe instrument.
24
 3) The 23% people in Nanded invest their money in Insurance, because they are not ready
to take the risk. They want the safety to their life.
4) Due to minimization in gold rates nowadays only 7% of the population is investing their
money in Gold.

Preference of mutual fund schemes by customers:

1) Equity funds (49%) are the main funds who are giving tough competition compared to
balanced and debt funds in Nanded city,
2) Sharekhan is one of the fastest growing broking firms in India. They are using various
strategies to capture the market.
3) They are selling various types of mutual funds like SBI, UTI, ICICI, HDFC etc.

25
 4) Debt funds (40%) are also doing well in these conditions because of continuous negative
trend in the market.
5) Balanced funds (11%) are having fewer shares in the market.

Preference of customers according to age:

14
14

12
10
10

8 Equity
Balance
6
4 Debt
4 3 3
2
2
0 0 0
0
21-30 31-40 >40

1) According to preferences it is observed that younger customers prefer equity funds and
also it is found that balanced funds and debt funds are less as compared to equity funds.

2) The middle aged customers are risk averse one so they are less interested towards the
balanced and debt funds rather than equity funds.

26
 SUGGESTIONS
From this Project I find out that the most of the customers in the Nanded city are not investing
their money in the Mutual funds due to the lack of the Knowledge and the Awareness about the
Mutual funds. But those who have knowledge about the mutual funds some of them are
investing their money in the Share Market rather than investing it in mutual funds

The people are giving more preference to safe instruments of investments like bank FD’s and
Insurance rather than mutual funds.

After that most of the customers are selecting equity mutual funds rather than balanced and debt
funds in the negative trend of the market.

Then I also find out that Nanded is having most of the customers of middle class so that the
investment pattern of them are the safe instruments like bank FD’s and Insurance rather than
share market and mutual funds.

So I suggest that Sharekhan should give their preference to spread the knowledge about mutual
funds to most of the customers and tackle the situation of non investors.

27
 RECOMMENDATIONS
• As all we know that Sharekhan is one of the Stock Broking Firm.

• Most of the people in the Nanded city are unaware about mutual funds so, I think that
Sharekhan should organize some knowledge based programs to attract those types of
customers.

• Sharekhan should have to provide more facilities and services for convenience of the
customers so that they remain loyal with Sharekhan and be able to give more number of
the customers through references.

28
 CONCLUSIONS
• I understood the need analysis of customers

This is the main aim of my thesis, in that I have studied the need analysis adopted by

Sharekhan Ltd. to attract more number of customers. The need is the main thing while

investing in any kind of investment. So I have to understand various factors of

investment like Age, Income, and Preference towards any specific scheme.

• I made awareness about mutual funds

In the process of completing the thesis I made the awareness amongst the people about

the mutual fund schemes i.e. Equity, Balanced or Debt schemes.

• I analyze the customer’s preference towards investment i.e. equity, debt

or balanced funds

29
While studying the need analysis adopted by Sharekhan Ltd. I also have to study the

customer’s preference towards any specific scheme i.e. he is interested in which scheme

to invest his money. So I come to know that most customers prefers Equity funds rather

than balanced or debt funds.

30