Karvy Stock Broking LTD Executive Summary: Kumudben Darbar Bba/Bca College, Bijapur

KARVY STOCK BROKING LTD
EXECUTIVE SUMMARY
This study was under taken at “karvy Stock Exchange Ltd.” At Bijapur District.
The study mainly deals with providing advisory services investor. This study
is to conduct an analysis of the pattern of investment made by the investors at
Karvy stock broking Ltd in the Mutual Funds and to suggest possible solutions
to increase awareness among the investors in Mutual Funds.
In order to undertake this study, statistical tools such as Pie Charts, Tabular
data analysis, etc…, Secondary data provided by the firm and direct
interaction with the investors have been used.
In this study majority of respondents neglecting the Mutual Funds and Bank
deposits; Majority preference for long term investment and average
performance of Mutual Funds Compared to other investment avenues, etc…,
have come to light.
Primary data was collected through a set of structured Questionnaires, which
have been asked to the respondents. Various suggestions have been provided
for increasing the awareness and investment pattern. The firm should
communicate to the investors about the opportunities and benefits of
investing in Mutual Funds. It should communicate to the investors about the
opportunities and benefits of investing in Mutual Funds. It should start an
investor club to create awareness, etc….
The study of this conclusion part is that the project by stating the current
scenario of Mutual Funds in our Indian Market and the investors general
perception about the Mutual Funds.
KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 1

TITLE OF PROJECT
A study on Performance Evaluation of Mutual Funds Investors with
reference to Karvy Stock Broking Limited in Bijapur City.”
OBJECTIVE OF THE STUDY

This Study undertaken at the Karvy Stock Broking Limited at Bijapur
City. Following objectives are as follows:-
 To know the attitude of investors towards Mutual Funds & other

investment avenues.
 To know the advantages and dis-advantages of Mutual Funds.
 To come up with the awareness of Mutual Funds.
 To understand about the future Mutual Funds.

Research Methodology
Methodology:-
 Both the primary and secondary data’s are used in the report.
Primary Data:-
 Interaction with the Branch Manager and staff Stock Broking

Limited, Bijapur Branch.
 Set of questions asked to the investors with the clients of
KARVY.
Secondary DATA :-
 From the Internet and Magazines.
Limitations of the Study:-

The time confined for study is very limited which does not
enable to make a comprehensive study.
Non-availability of suitable respondents for interviewing
during the period at which project has been undergone.

-: INTRODUCTION :-
Economic Liberalization has accelerated the pace of development in the

India Securities Market which has undergone a sea exchange during the last 2
decades. The role of securities Market in mobilizing and canalizing private
capital for the Economic Development of the country has increased over the
years and the Securities itself has undergone Structural transformation with
the introduction of the computerized online interconnected Market System.
Over the years as investment in securities gathered momentum and the

need for the national analysis. Only recently security analysis and portfolio
management has emerged as an important tool for investors and it is evident
that rational investment activity involves creation of an investment portfolio.
A portfolio is a group of securities held together as an investment. By

constructing a portfolio investors attempt to spreads risk by not putting their
eggs into 1 basket.
Each individual security has its own risk and return characteristics which can
be measured and express quantitatively. Each portfolio by combining the
individual securities has its own specific risk and returns characteristics,
which are not just the aggregate, the individual security characteristics. The
return and risk of each portfolio has to be calculated mathematically and
expressed quantitatively. This demands the process of selecting of optimum
portfolio.

INDUSTRY PROFILE

SECURITIES MARKET IN INDIA
Introduction:
Capital market is the backbone of any country’s economy. It
facilitates conversion of savings to investments. Capital market can be
classified as primary and secondary market. The fresh issue of securities takes
place in primary market and trading among investors takes place in
secondary market. Primary market is also known as new issue market. Equity
first enter capital market though investment in primary market. In India,
common investors participating in the equity primary market is massive. The
number of companies offering equity though primary markets increased
continuously in the post independence period till the year 1995. After 1995,
there is a continuous slump experienced by the primary market offering
equity. The main reason for slump is lack of investors’ confidence in the
primary market. So it is important to understand the causes and measures of
revival of investors’ confidence leading to capital mobilizing and investment
in right avenues creating, economic growth in the country.
Globally, there are increased evidences to suggest that investor confidence

has assumed an important role in the economic development of a country. The
economist (1998) indicated that a lot of issues need to address to make capital
markets safer. Transparency, strengthening financial system and managing
crises are the issues, which cannot be quickly fixed. But they add up to a
stronger system.

“The Securities market is the market for equity, debt and derivatives.” The
securities market has essentially 3 categories that is the issuer of securities,
the investors in the securities and intermediaries. The issuers are the
borrowers or deficit savers, who issue securities to raise funds. The investors,
who are surplus savers, deploy their savings by subscribing to these
securities. The intermediaries were the agents who match the needs of the
users and suppliers of funds for a commission.
These intermediaries pack and unpack securities to help both the

users and investors to achieve their respective goals. There are a large variety
and number of intermediaries providing various services in the Indian
Securities market. This process of Mobilizing of resources is carries out under
the supervision and overview of regulators. The regulators develop fair
market practices and regulate the conduct of issuer’s securities and
intermediaries. They are also in charge of protecting the interest of the
investors. The regulator ensures a high service standard from the
intermediaries and supply of equity securities and non manipulated demand
for them in the market.

EQUITY CULTURE IN THE INDIAN FINANACIAL SYSTEM

The capital market services as a reliable guide to the performance
and the financial position of companies and ties up companies and there by
promoters efficiency. It values firms accurately and ties up manager
composition to stock value and there by provides incentives to managers to
maximize firm value. It thus helps to align the interests of the managers and
there by efficient resources allocation growth.
A near continuous valuation of companies as reflected in share

prices and the implied possibility of mergers and takeovers are conducive to
financial discipline and more efficient allocation of capital.
Stock market promoter’s growth through the creation of liquidity. Many

profitable investments require long term capital but investors are often
reluctant to control over their savings for long periods. Equity market makes
investment less risky, more profitable and more attractive by making it more
liquid. By facilitating long term and more profitable investment, liquid stock
market improves the allocation of capital and enhances growth. Through
these effects, stock market liquidity can lead to more savings and investment
also.
Historically, many investors and been made much before they become
innovations. Inventions become innovations and ignited industrial revolution
when liquid financial market made it possible to develop projects that require
large capital injections for long periods. The industrial revolution had wait the
financial revolution took place.
Since high projects tend to comparatively risky, stock market that facilitates
risk diversification through international integration can encourage a shift to
higher return projects and thereby help to promote growth.
Large active and liquid stock markets induce investors to research and
monitor firm and the resulting improved information improves resource
allocation and accelerates growth.

STOCK EXCHANGE IN INDIA

The market for long term securities like bonds. Equity stock and
preferred stocks are divided in two primary and secondary markets. The
primary market deals with the new issues of securities. Outstanding securities
are traded in the secondary market which is commonly known as stock
market or stock exchange. In the Secondary market the investors can sell n
buy securities. Stock markets predominantly deal in the equity share. Debt
instruments like bonds and debentures are also traded in the stock market.
Well regulated and active stock market promotes capital formation. Growth of
the primary market depends on the stock market. The health of the company
reflected by the growth of the stock market.
The origin of the stock exchange in India can be traced back to the later of
the 19th century. After the American civil war (1860-61) due to the share mania
of public, the number of brokers dealing in share increased. The brokers
organized an informal association of brokers dealing in share increased. The
brokers association” in 1975. At presently in India there are 23 stock
Exchanges are there and situated in various part of the country. All the stock
exchanges in India are controlled by SEBI (Security Exchange Board of India).
FUNCTIONS OF STOCK MARKET

 Provide quotations of share/ stock for facilitating trading and
marketability.
 Extend liquidity to such stock as they are easily marketable and traded.
 Promotes savings and investment in the economy by attracting funds
for investment incorporate shares securities.
 Ensures safe and fair dealing.
 Maintain active trading.

NATIONAL STOCK EXCHANGE

The National stock Exchange (NSE) is India’s leading stock
exchanges covering various cities and towns across the country. NSE was set
up by leading institution to private a modern, fully automated screen -based
trading system speed and efficiency. Safety and market integrity. It has set up
facilities that serve as a model for the securities industry in terms of systems,
practices and procedures.
NSE has played a catalytic role in reforming the Indian securities market in
terms of microstructure, market practices and trading volumes. The market
today uses state –of- art information technology to provide an efficient and
transparent trading, clearing and settlement mechanism, and has witnessed
several innovation in product and services viz. demutualization and electronic
transfer of securities, securities lending and borrowing, professionalization of
trading members, find-tuned risk management system, emergence of clearing
corporations to assume counterparty risk, market of dept and derivative
instruments and intensive use of information technology.
The National stock Exchange of India Ltd as genesis in the report the
high powered study group on establishment of new stock exchange, which
recommended promotion of national stock exchange, by financial institution
[Fls] to provide access to investors from all across the country on an equal
footing. Based on the recommendations, NSE was promoted by leading
financial institution at the behalf of the GOVT of India and was incorporated
November 1992 as a tax paying company unlike other stock exchange in the
country.
On its recognition as a stock exchange under the securities contracts
(Regulations) Act, 1956 in April 1993 NSE commenced operations in the
Wholesale Debt Market (WDM) segmenting JUNE 1994. The capital market
(Equities) segment commenced operation in November 1994 and operations
in derivatives segment commenced in June 2000.

LOGO OF NSF
The logo of the NSE symbolizes nationwide securities trading facilities

equal and fair access to investors, trading number and issues all over the
country. The initials of the Exchange Viz. N, S and E have been attached on the
logo and a distinctly visible. The logo symbolizes connectivity to bring about
the change within the securities industry. The logo symbolizes vibrancy and
unleashing of creative energy to constantly bring about change through
innovations.
Promoters
NSE has been promoted by leading financial institutions, Banks, insurance,
companies and other financial intermediaries.
 Industrial Development Bank of India Limited.
 Industrial Finance Corporation of India Limited.
 Life Insurance Corporation of India.
 State Bank of India.
 ICICI Bank Limited.
 IL and FS Trust Company Limited.
 SBI Capital Market Limited.
 Bank of Baroda.
 Canara Bank.
 General Insurance Corporation of India.
 National Insurance Company Limited.
 The Oriental Insurance Company Limited.
 United India Insurance Company Limited.

 Punjab National Bank.

 Oriental Bank of Commerce.
 Indian Bank
 Union Bank of India.
 Infrastructure Development company Limited.
National stock Exchange (NSE) of India became operational in the capital
market segment on 3rd November 1994 in Mumbai. The genesis of the NSE lies in
the recommendations of the Pertain Committee (1991). Apart from NSE, it
had recommended for the establishment of National Stock Market the defects
specified.
 Lack of liquidity in most of the markets in term of depth and breadth.
 Lack of ability to develop markets for debt.
 Lack of infrastructure facilities and outdated trading system.
 Lack of transparency in the operations that effect investor’s confidence.
 Outdated settlement system that are inadequate to cater to the growing
volumes, leading to delay.
The Main Objectives of NSE As follows

 To establish a nationwide trading facility for equities, debt instruments
and hybrids.
 To ensure equal access to investors all over the country through
appropriate communication network.
 To provide a fair, efficient and transparent securities market to
investors using an electronic communication network.
 To enable shorter settlement cycle and book entry settlement system.
 To meet current international standards of securities market.

Advantages of NSE
Wider Accessibility
The NSE ensures wider accessibility through satellite
linked facility computer terminals and links with VAST helps the trades to
contact their counterparts in other parts of the country quickly .The quick
trading system ensures batter pricing.
Screen Based Trading

Originally, the basic advantage of NSE is computer based trading.
The back office loads have been reduced as everything is stored in the
computer. At present BSE and many other stock exchanges have
introduced the computer based trading. The ring based trading is vanishing
in the recent days.
Non Disclosure of the Trading Member’s Identity

While placing the orders there is no need to disclose the identity
of the member on the screen. It depends upon the wish of the trading
members. So without any fear of influencing the price. Any member can
place size orders.
Effective Settlement of Corporate Benefits

All monetary benefits lodged dividend interest and redemption
amount. Claims on company objections are debited/ credited directly in
the clearing account of the clearing members. This reduces the problems
faced by the members in settlement of corporate benefits.

RECENT TRENDS IN NSE
Expansion
After establishing operation in Mumbai. The NSE had expanded its operation
to the other cities; NSE has installed 2580 VASTS in 317 cities across the
country. A break up of VSATs across 317 cities is given below.
Quality:- Apart from the consolidation of the market at the national level,
the transaction cost along with the bad deliveries has declined. The affective
fun cottoning on National Securities Clearing Corporation Limited is another
reason for it.
More Liquidity:- With its online system and quick trading facilities the
NSE has introduced some liquidity into the capital marker. In the last quarter
of 1997, the NSE was more liquid for the 835 scraps that accounted for 97% of
total trading volume. In number of trades, an indicator of the presence of the
retail investor, the NSE was ahead of the BSE.
Less Brokerage:-
Transparency in NSE allows the breaking up of the costs into brokerage fees,
market impact costs and clearing and settlement. The brokerage fee at the BSE
terminals outside Mumbai is 0.5% of the value transacted. On the NSE, it’s
around 0.1% of the value transacted.
Quick Clearing and Settlement

NSE has introduced a full range of clearing house facilities; a pan of
securities is processed at the regional clearing centers (Delhi, Chennai and
Calcutta). The inter region clearing facility provided at present, reduced that
risk of the members because of not getting timely delivery of shares or loss of
shares in transit. The facility is also expected to boost delivery based trading.

COMPANY PROFILE

ABOUT KARVY
The KARVY group was formed in 1983 at Hyderabad, India. Karvy
ranks among the top player in almost all the field it operates. Karvy
Computers shares Ltd is India’s largest Register and Transfer Agent with a
client base of nearly 500 blue chips corporate managing over 2 core accounts.
Karvy stock brokers Ltd, member of National stock Exchange of India. With
over 6,00,000 active accounts, it ranks among the top 5 Depository
Participated in India, registered with NSDL and CDSL karvy COM trade,
Member of NCDEX and MCX ranks among the top0 3 commodity brokers in
the country. Karvy Insurance Brokers is registered as a Broker with IRDA and
ranks among the top 5 insurance agent in the country. Registered with AMFI
as a corporate Agent Karvy is also among the top Mutual fund mobilize with
over Rs. 5,000 cores under management. Karvy Realty Services, which started
in 2006, has quick established itself as broker who adds value, in the realty
sector. Karvy global offers niche off shoring services to client in the US.
Karvy has 575 offices over 375 locations across India overseas at
Dubai and New York. Over 9,000 high qualified people staff Karvy.
Karvy – Early Days:-

Karvy the name comes from the names of the directors:
K – Mr. Krishna Prasad
A- Mr. Arun
R- Mr. Radha Krishna
V- Mr. Venkat Krishna
Y- Mr. Yogendar

The birth last of Karvy was on a modest scale in 1979. It began with the vision
and enterprise of a small group of practicing Chartered Accounts who founded
the flagship company. Karvy started with consulting and financial accounting
and carved inroads into the field of registry and share accounting by 1985.
Since then, Karvy have utilized its experiences and superlative enterprise to
go from.
Strength to Strength ….. To better its services, to provide new ones, to

innovative, diversity and the process, evolved karvy as one of India’s premise
integrated financial services enterprise.
GROWTH AND DEVELOPMENT OF KARVY

Over the last 20 years Karvy has traveled the success route, towards building
a reputation as an integrated financial services provider, offering a wide
spectrum of services. And they have made the journey by taking the route of
quality service. Path breaking innovation in service, versatility in service and
finally totality in service.
Their highly qualified manpower, cutting-edge technology, comprehensive

infrastructure and total customer- focus has secured for us the position of an
emerging financial services giant enjoying the confidence and support of an
enviable clientele across diverse fields in the financial world.
With the experience of years of holistic financial behind us and years of

complete expertise in the industry to look forward to, they have now emerged
as a premier integrated financial services provider.
And today, they can look with pride at the fruits of their mastery and
experience Comprehensive financial services that are competently segregated
to service and manage a diverse range of customer requirements.

AT PRESENT STATUS OF KARVY

Present Karvy is a member of National stock Exchange (NSE), the Bombay
stock Exchange (BSE), and The Hyderabad stock Exchange (HSE).Market
analysis and market predictions are done by professional management team.
KARVY as covering the spectrum of financial services such as stock Broking

Services, Advisory Services, Stock broking ,Depository Participants,
Distribution of financial products – mutual funds, fixed deposits, equities,
Insurance Broking Commodities Broking, Personal Finance Advisory Services,
Merchant Banking and corporate Finance, Placement Finance, Placement of
equity, IPO’s, among other.
VISION OF KARVY
To achieve and sustain market leadership, Karvy shall aim for complete
customer satisfaction, by combining its human and technological resources to
provide world class quality services. In the process Karvy shall strive to meet
and exceed customer’s satisfaction and set industry standards.
Their values and vision of attaining total competence in their servicing has
served as the building block for creating a great financial enterprise, which
stands solid on their fortresses of financial strength – their various companies.
MISSION OF KARVY
“Our mission is to be a leading and preferred services provider to
our customers, and we aim to achieve this leadership by building an
innovative, enterprising, and technology driven organization which
will highest standards of services and business ethics.”

MILE STONES OF KARVY

SERVICES PROFILE OF THE KARVY GROUP COMPANIES
KARVY STOCK BOKING LIMITED
Member – National Stock Exchange (NSE), the Bombay Stock Exchange (BSE),
and the Hyderabad Stock Exchange (HSE),
Karvy Stock Broking Limited, one of the cornerstones of the Kavry edifice,
flows freely toward attaining diverse goals of the customer through varied
services, creating a plethora of opportunities for the customer by opening up
investment vistas backed by research-based advisory services. Here, growth
knows no limits and success recognizes no boundaries. Helping the customer
create waves in his portfolio and empowering the investor completely is the
ultimate goal.
Why should Investors choose for KARVY …?
Excellence is next to nothing and here at Karvy everybody tries to offer

excellence services to its client through its offerings maintaining the Karvy
culture which included:-
1. Controlled and low cost services culture:- Karvy is there to serve its
client at the minimum possible costs.
2. Longer volume processing capability:- Being the largest financial service

provider in the country. It has the unique distinction of operating its activities
on a large scale which benefits all the parties cordially.
3. Adherence to strict time Schedule:- Karvy knows that time is money and
tries it best to finish the task within the stipulated time schedule.

4. Expertise in coordinating Multi-location Responses:- Karvy has got a

wide network and hence I can find its branches at most of the places in India.
Thus it enjoys its presence everywhere and co-ordinates among itself in
solving the quarries and in responding to any situation.
5. Expertise in managing independent entities such as Banks, Post-

offices, etc:- The work culture of Karvy and the ethics followed inside Karvy
Makes its workforce with everybody. So the Karvy person establishes good
coordination with independent entities too.
6. Pooling of Group Resources:- Karvy group consists of 8 subsidiaries. So it

can easily pool up its resource for accomplishment of its goals, whenever
needed. The group can help each other whenever there are peaks and lows
and even in the case when they have huge targets just as we saw few years’
bank, Tata group pooling its resources to acquire Corus.

STOCK BROKING SERVICES

It is an undisputed fact that the stock market is unpredictable and yet
enjoys a high success rate as a wealth management and wealth accumulation
option. The difference between unpredictability and safety anchor in the
market is provided by in –depth knowledge of market functioning and
changing trends, planning with foresight and choosing options with care. This
is what they provide in their Stock Broking services.
They offer services that are beyond just a medium for buying and
selling stocks and shares. Instead they provide services which are multi
dimensional and multi-focused in their scope. There are several advantages in
utilizing their stock Broking services, which are the reasons why it is one of
the best in the country.
They offer trading on a vast platform; National Stock Exchange.

Bombay Stock Exchange and Hyderabad stock Exchange .More importantly,
they make trading safe to the maximum possible extent, by accounting for
several risk and planning accordingly. They are assisted in this takes by their
in-depth research, constant feedback and sound advisory facilities. Their
highly skilled research team, comprising of technical analysts as well as
fundamental specialists, secure result-oriented information on market trends,
market analysis and market predictions.
This crucial information is given as a constant feedback to their

customers, through daily reports delivered thrice daily; The Pre-session
Report, where market scenario for the day is predicted, The Mid- session
Report, timed to arrive during lunch break, where the market forecast for the
rest of the day is given and the post-session Report,the final report for the
day, where the market and report itself is reviewed. To add to this repository
of information, they publish a monthly magazine.

“The Finapolis” which analyzed the latest stock market treads and
takes a close look at the various investment options, and products available in
the market, while a weekly report, called “Karvy Bazaar Baatein”, keeps
clients more informed on the immediate trends in the stock market. In
addition, their specific industry reports give comprehensive information on
various industries. Besides this, they also offer special portfolio analysis
packages that provide daily technical advice on scraps for successful portfolio
management and provide customized advisory services to help you make the
right financial moves that are specifically suited to their portfolio.
Stock Broking services are widely networked across India, with the
number of trading terminals providing retail stock broking facilities. Its
services have increasingly offered customer oriented convenience, which they
provide to a spectrum of investors. High-net worth or otherwise, with equal
dedication and competence.
But true to their spirit, this success is not their final destination, but
just a platform to launch further enhanced quality services to provide you the
latest in convenient, customer-friendly stock management.
Over the years Karvy have ensured that the trust of customers is their
biggest returns. Factors such as their success in the Electronic custody
business has helped build on their tradition of trust even more.
Consequentially their retail client base expanded very fast.
To empower the investor further they have made serious efforts to

ensure that their research calls are disseminated systematically to all their
stock broking clients through various delivery channels like email, chat, SMS,
phone calls etc.

Their foray into commodities broking has been path breaking and they
are in the process of converting existing traders in commodities into the more
organized mainstream of trading in commodity futures, both as a trading and
risk hedging mechanism.
In the future, their focus will be emerging businesses and to meet this
objective, they have enhanced their manpower and revitalized their
knowledge base with enhances focus on Futures and Options as well as
commodities business.

DEPOSITORY PARTICIPANTS
The onset of the technology revolution in financial service Industry
saw the emergence of Karvy as an electronic custodian registered with
National Securities Depository Ltd (NSDL) and central Securities Depository
Ltd (CSDL) in 1998.Karvy set standards enabling further comfort to the
investor by promoting paperless trading across the country and emerged as
the to 3 Depository Participants in the country in terms of customer serviced.
Offering a wide trading platform with a dual membership at both

NSDL and CDSL, they are a powerful medium for trading and settlement of
dematerialized shares. They have established live DPMs, Internet access to
accounts and an easies transaction process in order to offer more convenience
to individual and corporate investors. A team of process in order to offer more
convenience to individual and corporate investors. A team of professional and
the latest technological enhancements like SPEED-e make their response time
quick and their delivery impeccable, A wide national network makes their
efficiencies accessible to all.
ADVISIORY SERVICES
Under their retail brand ‘Karvy –the finapolis’, they deliver advisory
services to a cross- section of customers. The service is backed by a team of
dedicated and expert professionals with varied experience and background in
handling investment portfolios. They are continually engaged in designing the
right investment portfolio for each customer according to individual needs
and budget considerations with a comprehensive support system that
focuses on trading customers’ portfolios and providing valuable inputs,
monitoring and managing the portfolio through varied technological initiative.
This is made possible by the expertise they have gained in the business over
the years. Another venture towards being investor friendly is the circulation
of a monthly magazine called ‘Karvy –the Fin polis’. Covering the latest of
market news, trends, investment schemes and research-bases opinions from
experts in various financial fields.

MUTUAL FUNDS SERVICES

Karvy has attained a position of immense strength as a provider of across
the board transfer agency services to AMCs, Distributors and Investors. Nearly
40% of the top AMCs including prestigious client like Deustsche AMC and UTI
swear b y the quality and range of services that karvy offers. Beside providing
the entire bank office processing. Karvy provides the link between various
Mutual Funds and the investors including services to the distributor, the
prime channel in this operation. Carrying the limitless ideology forward.
Karvy has explored new dimensions in every aspect of Mutual Fund Servicing
right from volume management, cost effective pricing, and delivery in the
least turnaround time, efficient back office and front office operations to
customize services. Karvy has explored new dimensions in every aspect of
Mutual fund servicing right from volume management, cost effective pricing,
and delivery in the least turnaround time, efficient back office and front office
operations to customize services. Karvy has been with the AMCs every step of
the way, helping them serve their investors better by offering them a diverse
and customized range of services.
The first to market approach that is Karvy’s Service enhancements such as

Karvy Covers, a full-fledged call center, top-line website
(www.Karvymfs.com), the investors and many more, creating a of galaxy of
customer advantages.

KARVY CONSULTANCY LIMITED

As the flagship company of the Karvy Consultants limited has always
remained at the helm of organizational affairs, pioneering business policies,
work ethic and channels of progress.
Having emerged as a leader in the registry business, the first of the

businesses that they ventured into, they have now transferred this business
into a joint venture with Computer share Limited of Australia, The world’s
largest registrar. With the advent of depositories in the Indian capital marked
and the relationships they have created in the registry business, they believe
they were best positioned to venture into this activity as a Depository
Participant. They were one of the early entrants registered as Depository in
the country and then with CDST (Central Depository Services Limited). Today,
they service over 6 lakhs customer accounts in this business spread across
over 250 cities/towns in India and are ranked amongst the largest Depository
Participants in the country. With a growing secondary market presence, they
have transferred this business to karvy stock Broking Limited (KSBL),their
associate and a member of NSE, BSE and HSE.

KARVY INVESTOR SERVICE LIMITED

Merchant Banking
Recognized as a leading merchant banker in the country, they are
registered with SEBI as a category I merchant banker. This reputation was
built by capitalizing on opportunities, which have earned us the reputation of
a merchant banker. Raising theories for corporate or Government
Undertaking successfully over the past two decades have given us the
confidence to renew their focus in this sector.
Their quality professional team and their work-oriented dedication

have propelled us to offer value-added corporate financial services and act as
a professional navigator for long term growth of their clients, who include
leading corporate, State Governments, foreign institutional investors, public
and sector companies and banks, in Indian and global markets.
They have also emerged as a trailblazer in the arena of relationships,

both at the customer and trade levels because of their unshakable integrity,
seamless service and innovative solutions that are tuned to meet varied needs.
Their team of committed industry specialists, having extensive experience in
capital markets, further nurtures this relationship.
Their financial advice and assistance in restructuring, divestitures,

acquisitions, de-mergers, spin-offs, joint ventures, privatization and takeover
defense mechanisms have elevated their relationship their relationship with
the client to one based on unshakable trust and confidence.

KARVY GIOBAL SERVIVES LIMITED

The specialist Business Process of the Karvy Group. The legacy of
experience in financial services of the Karvy Group Serves us well as they
enter the global arena with the confidence of being able to deliver well.
Here they offer several delivery models on the understanding that

business needs are unique and therefore only a customized service could
possibly fit the bill. Their service matrix has permutations and combinations
that create several options to choose from.
Be it in re-engineering and managing processes or delivering new

efficiencies, their service meets up to the most stringent of international
standards. Their outsourcing models are designed for the global customer and
are backed by sound corporate and operations philosophies, and domain
expertise. Providing productivity improvements operational cost control, cost
savings, improved accountability and a whole gamut of other advantages.
They operate in the core market segments that have emerging

requirements for specialized services. Their wide vertical market coverage
includes Banking, Financial and Insurance Services (BFIS), Retail and
Merchandising, Leisure and Entertainment, Energy and Utility and Healthcare.

KARVY INSURANCE BROKING PRIVATE LIMITED
At Karvy Insurance Broking Pvt. Ltd., they provide both life and non-life
insurance products to retail individuals, high net –worth clients and
corporate. With the opening up of the insurance sector and with a large
number of private players in the business, they are in a position to provide
tailor made policies for different segments of customers. Itheir journey to
emerge as a personal finance advisor, they will be better positioned to
leverage their relationships with the product providers and place the
requirements of their customers appropriately with the product providers.
With Indian markets seeing a sea change, bout in terms of investment pattern
and attitude of investors, insurance is no more seen as only a tax saving
product but also as an investment product By setting up a separate entity,
they would be positioned to provide the best of the products available in this
business to their customers.
Their wide national network, spanning the length and breadth of India,
further supports these advantages. Further, personalized service is provided
here by a dedicated team committed in giving hassle- free service to the
clients.

KARVY COMMODITIES BROKING PRIVATE LIMITED
Commodities market, contrary to the belief of many people, has been
in existence in India through the ages. However the recent attempt by the
Government to permit Multi-commodity National levels exchanges has indeed
given it, a shot in the arm. As a result two exchanges Multi Commodity
Exchange (MCX) and National Commodity and derivatives Exchange (NCDEX)
have come into being. These exchanges, by virtue of their high profile
promoters and stakeholders, bundle in themselves, online trading facilities,
robust surveillance measures and a hassle-free settlement system. The future
contracts available on a wide spectrum of commodities like Gold, Silver,
Cotton, Steel, Soya beans, Wheat, Sugar, Channa etc., provide excellent
opportunities for hedging the risks of the farmers, importers, exporters,
trades and large scale consumers, they also make open an avenue for quality
investments in precious metals. The commodities market, as it is not affected
by the movement of the stock market or debt market provides tremendous
opportunities for better diversification of risk. Realizing this fact, event
mutual funds are contemplating of entering into this market.
Karvy COM trade Limited is another venture of the prestigious Karvy

group. With their well established presence in the multifarious facets of the
modern financial services industry from stock broking to registry services, it
is indeed a pleasure for us to make foray into the commodities derivatives
market which opens yet another door for us to deliver their service to their
beloved customers and investor public at large. With the high quality
infrastructure already in place and a committed Government providing
continuous impetus, it is the responsibility of us, the intermediaries to deliver
these benefits at the door-steps of their esteemed customers.
With their expertise in financial services, existence across the lengths
and breadths of the country and an enviable technological edge, they are all
set to bring to you, the pleasure of investing in this burgeoning market, which
can touch upon the lives of a vast majority of the population from the farmer
to the corporate alike. They are confident that the commodity futures can be a
good value addition to their portfolio.

The company provides investment, advisory and brokerage services in
Indian commodities Markets. And most importantly, they offer a wide reach
through their branch network of over 255 branches located across 180 cities.
KARVY COMPUTERSHARE PRIVATE LIMITED

KARVY have traversed wide spaces to tie up with the world’s largest
transfer agent, the leading Australian company, Computershare Limited. The
Company that services more than 75 million shareholders across 7000
corporate clients and makes its presence felt in over 12 countries across 5
continents has entered into a 50-50 joint venture with us.
With its management team completely transferred to this new entity, they
will aim to enrich the financial services industry than before. The future holds
new arenas of client servicing and contemporary and relevant technologies as
the are geared to deliver better value and foster bigger investments in the
business. The worldwide network of Computershare will hold us in good as
they expect to adopt international standards in addition to leveraging the of
best of technologies from around the world.
Excellence has to be the order of the day when two companies with such
similar ideologies of growth, vision and competence, get together.

ISSUE REGISTRY
Karvy towards becoming the largest transaction-processing house in
the Indian Corporate segment, they have mobilized fund for numerous
corporate sector. With an experience of handling over 700 issues, Karvy
today, has the ability to execute Voluminous transactions and hard-core
expertise in technology applications have gained us the No.1 slot in the
business. Karvy is the first Registry Company to receive ISO 9002 certification
in India that stands testimony to its stature.
Karvy has the backing of skilled human esthetic complemented by
requisite technological packages to ensure a faster processing capability.
Karvy has the benefit of a good synergy between depositories and registry
that enables faster resolution to related customer queries. Apart from its
unique investor servicing presence in all the phases of related customer
queries. Apart from its unique investor servicing presence in all the phases of
a public Issue, it is actively coordinating with both the main depositories to
develop special model to enable the customer to access depository (NSDL,
CDSL) Services during an IPO.
Their trust-worthy reputation, competent manpower and high-end
technology and infrastructure are the solid foundations on which their
success is built.

Registered office
“KARVY HOUSE”
46, Avenue 4, Streeet No.1,
Banjara Hills,
Hyderabad-500 034
Andhra Pradesh,
India.
Telephone:- +91-40 -23312454
Fax :- +91-40-23311968
E-Mail :- Mailmanager@karvy.com

INDUSTRY ANALYSIS
HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY

The mutual fund industry can be broadly put into 4 phases according
to the development of the sector. Each phase is briefly described as under.
FIRST PHASE (1964-87):-

Unit trust of India (UTI) was established on 1963 by an Act of
parliament. It was set up by the Reserve Bank of India and functioned under
the Regulatory and administrative control of the Reserve Bank of India. In
1978 UTI was de-linked from the RBI and the Industrial Development Bank of
India (IDBI) took over the regulatory and administrative control in place of
RBI. The first scheme launched by UTI was unit scheme 1964. At the end of
1988 UTI had Rs. 6,700 corers of Assets Under Management (AUM).
SECOND PHASE (1987-93) :- ENTRY OF PUBLIC SECTOR FUNDS

Energy of non-UTI Mutual Funds. SBI Mutual Funds was the first followed by
can
Bank Mutual Fund (Dec-87),
Punjab National Bank Mutual Funds (Aug-89),
Indian Bank Mutual Funds (Nov-89),
Bank of India Mutual Funds (June-90),
Bank of Baroda Mutual Fund (Oct-92),
LIC in 1989 and GIC in 1990. The end of 1993 marked Rs. 47,004 as Assets
Under Management.

THIRD PHASE (1993-2003):-

ENTRY OF PRIVATE SECTOR FUNDS
With the entry of private sector Funds in 1993, a new Era started in the
Indian Mutual Fund Industry giving the Indian investors a wider choice of
fund families. Also in 1993 was the year in which the first mutual fund
regulation came into existence under which all Mutual Funds, except UTI were
to be registered and governed. The Erstwhile Kothari Pioneer (now merged
with Franklin Templeton) was the first private sector Mutual Fund Registered
in July 1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more
comprehensive and revised Mutual Fund Regulation in 1996. The industry
now function under the SEBI (Mutual Funds) Regulations 1996.
The number of Mutual Funds houses went on increasing with many
foreign mutual funds setting up funds in India and also the industry has
witnessed several mergers and acquisition. As at the end of January 2003,
there were 33 mutual funds with total assets of Rs. 1,21,805 corers. The UTI
with Rs. 44,541 corers of assets Under Management was way ahead of the
Mutual Funds.

FOURTH PHASE ( SINCE FEBRURARY 2003):-

This phase had bitter experience for UTI. It was bifurcated into @
separate entities. 1 is the specified undertaking of the UTI with AUM of Rs.
29,835 corers (as on January 2003). The specified undertaking of the UTI,
functioning under an administrator and under the rules frames by
Government of India and does not come under the preview of the Mutual
Funds Regulations.
The second in the UTI Mutual Funds LTD, sponsored by SBL, PNB and
LIC. It is registered with SEBI and functions under the Mutual Funds
Regulation. With the bifurcation of the Erstwhile UTI which has in March 2000
more than Rs. 76,000 corers of AUM and with the setting of the UTI Mutual
Fund, confirming to the SEBI Mutual Fund Regulations and with recent
mergers taking place among different private sector funds, the Mutual Fund
industry has entered his current phase of consolidation and growth. As at the
end of September 2004, there were 29 Funds which manage assets of Rs.
1,53,108 corers under 421 schemes.

GROWTH IN ASSETS UNDER MANAGEMENT
NOTE:-
Erstwhile UTI was bifurcated into UTI Mutual Fund and the specific
undertaking of the UTI effective from February 2003. The AUM of the
specified undertaking of the UTI has, therefore been excluded from the total
assets.

MUTUAL FUNDS CONCEPT

A Mutual Fund is trust that pools the savings of a number of investors
who share common financial goal, investments may be in shares, debt
securities, money market securities or a combination of these. Those
securities are professionally managed on behalf of the unit-holders, and each
investor holds a pro-data share of the portfolio i.e. entitled to any profits when
the securities are sold, but subject to any losses in value as well.
The income earned through these investments and the capital

appreciations realized are shared by its unit holders in proportion to the
number of units owned by them. Thus a Mutual Fund is most suitable
investment for the common man as it offers an opportunity to invest in
diversified, professionally managed basket of securities at a relatively low
cost.

PERFORMANCE OF MUTUAL FUNDS IN INDIA

Let us start the discussion of the performance of Mutual Funds in India
from the day of concept of Mutual Fund took birth in India. The year was
1963, UTI invited investors or rather to those who believed in saving, to park
their money in UTI Mutual Funds.
For 30 years it goaled without a single second player. Through the 1988
year saw some new Mutual Fund companies, nut UTI remained in monopoly
position.
The performance of Mutual Funds in Indian in initial phase was not

closer to satisfactory level. People rarely understood and course investing was
out of question. But yes some 24million shareholders were accustomed with
guaranteed high returns by the beginning of liberalization of the industry
1992. This good record of UTI became marketing tool for new entrants. The
expectations of the investors touched the sky in profitability factor. However,
people were miles away from the preparedness of risks factor after the
liberalization.
The AUM of UTI was Rs. 67billion, by the end of 1987. Let me
concentrate about the performance of Mutual Funds in India through figures.
From Rs. 67billion, the AUM raise to Rs. 470billion in March 1993 and the
figure had a 3 times higher performance by April 2004. It raise as high as Rs.
1,540billion.
The Net Asset value (NAV) of Mutual Funds in India declined when stock
prices started falling in the year 1992. Those days, the market regulation did
not allow portfolio shifts into alternative investments. These were rather no
choices apart from holding the cash or to further continue investing in shares.
One more thing to be noted, since only closed-end Funds were floated in the
market, the investors disinvested by selling at a loss in the secondary market.

The performance of Mutual Fund in India suffered qualitatively. The
1992 Stock Market scandals the losses by dis-investments and off course the
lack of transparent rules in the where about rocked confidence among the
investors. Partly owing to relatively weak Stock Market performance. Mutual
Funds have not yet recovered, with Funds trading at an average discount of
1020% of their NAV.
The supervisory adopted a set of measures to create a transparent and

competitive environment in Mutual Funds. Some of them were like relaxing
investment restrictions into the market, introduction of Open-ended Funds
and paving the gateway for Mutual Funds launch pension Schemes.
The measure was taken to make Mutual Fund the key instrument for
long-term saving. The more the variety offered, the quantitative will be
investors.
At last to mention, as long as Mutual Funds Companies are performing

with lower risks and higher profitability within a short span of time, more and
people will be inclined to invest until and unless they are fully educated with
the dos or don’ts of Mutual Funds.

HOW DOES A MUTUAL FUND WORK?

MAJOR MUTUAL FUNDS IN INDIA

 IDBI Principal Mutual Fund.
 Zurich India Mutual Fund.
 Alliance Capital Mutual Fund.
 HDFC Mutual Fund.
 UTI Mutual Fund.
 TATA Mutual Fund.
 SBI Mutual Fund.
 Birla Sunlife Mutual Fund.
 CAN Bank Mutual Fund.
 RELIANCE Capital Mutual Fund.
 ESCORT Mutual Fund.
 Franklin Templeton Mutual Fund
 Sidearm Mutual Fund.
 Cholamandal Mutual Fund.
 Kothari Pioneed Mutual Fund.
 Kodak Mahindra Mutual Fund.
 Prudential ICICI Mutual Fund.
 J M Mutual Fund.
 IL and FS Mutual Fund.
 ING Saving Trust Mutual Fund.
 Sun F and C Mutual Fund.
 ANZ Grind lays Mutual Fund.
 BOB Mutual Fund.
 DSP Merillynch Mutual Fund.
 Dundee Mutual Fund.
 GIC Mutual Fund.
 LIC Mutual Fund.
 PNB Mutual Fund

MUTUAL FUNDS- ORGANIZATION

There are many entities involved and the diagram below illustrate the
organization set up of Mutual Fund
THE STRUCTURE CONSISTS OF :-

Sponsor:-
Sponsor is the person who acting or in combination with another body

corporate establishes a mutual fund. Sponsor must contribute at least 40% of
the net worth of the Investment Managed and meet the eligibility criteria
prescribed under the Securities and Exchange Board of India (Mutual Funds)
Regulation, 1996. The Sponsor is not responsible or liable for any loss or
shortfall resulting from the operation of the Schemes beyond the initial
contribution made by it towards setting up of the Mutual Fund.
Trust:-
The Mutual Fund is constituted as trust in accordance with the

provision of the Indian Trust Act, 1882 by the Sponsor. The Trust deed is
registered under the Indian Regulation Act, 1908.

Trustee:-
Trustee is usually a company (corporate body) or a Board of Trustees

(body of individuals). The main responsibility of the Trustee is to safeguard
the interest of the unit holders and inter alias ensure that the AMC function in
the interest of investors and in accordance with the Securities and Exchange
Board of India (Mutual Fund) Regulation, 1996, the provision of the Trust
Deed and the Offer Documents of the respective Schemes. At least 2/3rd
directors of the Trustee are independent directors who are not associated
with the Sponsor in any manner.
Asset Management Company (AMC):-
The Trustee as the Investment Manager of the Mutual Fund appoints the
AMC. The AMC is required to be approved by the SEBI to act as an asset
management company of the mutual fund. At least 50% of the directors of
AMC are an independent director who is not associated with the Sponsor in
any manner. The AMC must have a net worth of at least 10 corers at all times.
Registrar and Transfer Agent:-
The AMC if so authorized by the Trust Deed appoints the Registrar and
Transfer Agent to the Mutual Fund. The Registrar processes the application
form redemption request and dispatches account statement to the unit
holders. The Registrar and Transfer Agent also handle communication with
investors and updates investor records.

ADVANTAGES OF MUTUAL FUNDS
The Advantages of Investing in a Mutual Fund :-
Diversification:-
The best mutual fund designs their portfolio so individual investment

will react differently to the same economic conditions. For example, economic
conditions like rise in interest rates may cause certain securities in a
diversified portfolio to decrease in value. Other securities in portfolio will
respond to the same economic conditions by increasing in value. When a
portfolio is balanced in this way, the value of the overall portfolio should
gradually increase over time, even if some securities lose value.
Professional Management:-
Most mutual funds pay topflight professional to manage their

investment. These managers decide what securities the fund will buy and sell.
Regulatory Oversight:-
Mutual funds are subject to many government regulations that protect

investors from fraud.
Liquidity:-
It’s easy to get your money out of mutual fund. Write a check, make a
call, and you’ve got the cash.
Convenience:-
You can usually buy mutual fund shares by mail, phone or over the
Internet.

Low cost:-
Mutual fund expenses are often no more than 1.5% of your investment.
Expenses for Index finds are less than that, because index funds are not
actively managed. Instead they automatically buy stock bin companies that
are listed on specific index.
Transparency
Flexibility
Choice of Scheme
Tax Benefit
Well Regulated

DRAWBACK OF MUTUAL FUNDS
Mutual funds have their drawbacks and may not be for everyone
No Guarantees:-
No investment is risk free. If the entire stock market declines in value,

the value of mutual fund share will go down as well, no matter how balanced
the portfolio. Investors encounter fewer risks when they invest in mutual
funds than when they buy and sell stock on their own. However, anyone who
invests through a mutual fund runs the risk of losing money.
Fees and Commission:-
All funds charge administrative fees to cover their day-to-day expenses.

Some funds also charge sales commission or “loads” to compensate broker,
financial consultants, or financial planner. Even if you don’t use a broker or
other financial advisor, you will pay a sales commissions if you but shares in a
Load Fund.
Taxes:-
During a typical year, most actively managed mutual funds sell

anywhere from 20% to 70% of the securities in their portfolio. If your funds
make a profit on its sales, you will pay taxes on the income you receive, even if
you reinvest the money you made.

Management Risk:-
When you invest in mutual fund, you depend on the fund’s manager to
make the right decision regarding the fund’s portfolio. If the manager does not
perform as well as you had hoped, you might not make much money on your
investment as you expected. Of course, if you invest in index funds, you forego
management risk, because these funds do not employ managers.
 TAURUS Mutual Fund.

 Morgan Stanley Mutual Fund.
 HB Mutual Fund.
 Asia Pacific Mutual Fund.
 Apple Mutual Fund.

TYPES OF MUTUAL FUNDS

Mutual funds are free to design their schemes (subject to SEBI
regulations). Mutual Funds to suit the need of various investors. Broadly
mutual funds schemes can be dividing into open-ended and close-ended.
Open-ended Scheme:-
An open-ended fund is one that is available for subscription all through

the year. These do not have a fixed maturity. Investors can conveniently buy
and sell units at Net Asset Value (NAV) related prices. The key feature of open-
ended scheme is liquidity.
Close-ended Schemes:-
These schemes have a pre-specified maturity period. One can invest

directly in the scheme at the time of the initial issue. Depending on the
structure of the scheme there are two exit options available to an investor
after the initial offer period closes. Investor can transact (buy or sell) the units
of the schemes on the stock exchange where they are listed. The market price
at the stock exchange could vary from the Net Assets Value (NAV) of the
scheme on account of demand and supply situation, expectations of unit
holder and other market factors. Alternatively some closed-ended schemes
provide an additional option of selling the units directly to the mutual fund
through periodic repurchase at the schemes NAV. However one cannot buy
units and can only sell units during the liquidity window. SEBI Regulations
ensures that at least one of the two exit routes is provided to the investor.
The close-ended scheme has a fixed corpus and operates for fixed.
Period:-
At the time of maturity, the entire corpus is disinvested and the

proceeds are distributed to the unit holders in proportion to their holdings
after deduction of the expenses of the fund by its trustees.

FEATURES OF CLOSED-ENDED SCHEMES
Income/Debt Oriented scheme:-
The aim of income funds is to provide regular and steady income to

investor. Such schemes generally invest in fixed income securities such as
bonds, corporate debentures, Govt. securities and money market instruments.
Such funds are less risky compare to equity schemes. These funds are not
affected because of fluctuations in equity market. However, opportunities of
capital appreciation are also limited in such funds. The NAV’s of such funds
are affected because of change in interest rates in the country. If the interest
rate fall, NAVs of such funds are likely to increase in the short run and vice
versa. However, long term investors may not bother about these fluctuations.
Hybrid/Balanced Scheme:-
These schemes are commonly known as balanced schemes. These

schemes invest in both equities as well as debt. By investing in a mix of this
nature, balanced scheme seek to attain the objective of income and moderate
capital appreciation and are ideal for investors with a conservative, long term
orientation. Balanced fund and gift fund are example of Hybrid Scheme.
Tax Saving Scheme:-
These schemes offer tax rebates to the investor under specific provision
of the Income Tax, 1961 as the Govt. offers the tax incentives for investment in
specified avenues. E.g. Equity Linked Saving Schemes (ELSS). Pension Scheme
launched by the mutual funds also offers tax benefits. These schemes are
growth oriented and invest pre-dominantly in equities. Their growth
opportunities and risks associated are like any equity oriented scheme.

Gold Exchange-Traded Scheme
Exchange-traded funds (ETFs) are mutual fund schemes that are listed
and traded on exchange like stocks. ETFs trading value is based on the net
asset value (NAV) of the assets it represents. Generally, ETFs invest in a basket
of stocks and try to replicate a stock market index such as the S&P CNX Nifty
or BSE Sense, a market sector such as energy or technology, or a commodity
such as gold or petroleum.
Recently, the SEBI amended its regulations and allowed mutual funds
launch gold exchange-traded funds (GETFs) in India. Two mutual funds, UTI
mutual fund and Benchmark Mutual Fund, have been launched. These funds
got listed on the National Stock Exchange (NSE).
A gold-exchange traded fund unit is like mutual fund unit backed by

gold as the underlying asset and would be held mostly in demit form. An
investor would get securities certificate issued by the mutual fund running the
Gold-ETF defining the ownership of a particular amount of gold. GETFs are
designed to offer investors a means of participating in the gold bullion market
without the necessity of taking physical delivery of gold, and to buy, and sell
through trading of security on a stock exchange. With gold being one of the
important asset classes. GETFs will provide a better, simpler and affordable
method of investing as compared to other investment methods like bullion,
gold coins, gold futures, or jewelry.
Money Market/Liquid Scheme:-
These funds are also income funds and their aims is to provide easy
liquidity, preservation of capital and moderate income these schemes invest
exclusively in safer short term instrument such as treasury bills certificates of
deposit commercial paper and interbank call money government securities
etc return on these scheme fluctuate much less compared to other funds.
These funds are appropriate for corporate and individual investors as a means
to park their surplus funds for short periods.

Equity Fund :-
These funds invest a maximum part of their corpus into equities

holdings. The structure of the fund may vary different schemes and the fund
manager’s outlook on different stocks. The equity funds are sub-classified
depending upon their investment objective, as follows:
 Diversified Equity Funds

 Mild-Cap Funds.
 Sector Specific Funds.
 Tax Saving Funds (ELSS)
Real Estate Funds:-
Real estate Mutual Funds invest only in real estate and properties.
Leverage Fund:-
Leverage Fund or Borrowed Fund provides higher return to investor.

They invest in those where rate of return is higher than the cost of borrowing
thus multiplying the return (leverage effect). Such mutual funds invest in risky
investment indulge in speculative trading.
Hedge Funds:-
Such type of Mutual Funds like Leverage Funds employs their Funds in
speculative trading in shares. They buy shares whose prices are expected to
rise and sell those whose prices whose are going to fall in future.
Funds of Fund:-
Mutual Funds, which invest in other Mutual Funds, are called Funds of
Fund but these are not vogue in India.

Specialization Funds:-
These Mutual Funds invest in specialized channel like in specified

category of companies (automobiles, chemicals) or in specific country (India
fund), etc. the principal of diversification is abandoned by these specialized
funds.
Bond Fund:-
Bond Fund specializes in building a portfolio of corporate or mutual

bonds. They are conservative in nature and appeal to investors seeking both
safeties of principal and income.
Foreign Investment Fund:-
The aim of this fund is seeking geographical diversification companies

located in different countries are purchased.
Dual fund:-
A Dual Fund is special types of closed-ended scheme. The scheme has

two types of units, income units and capital units.

Theoretical frame work of Mutual Funds with Traditional Investment
Avenues
 Bank Deposit
 Bank Fixed Deposit
 Shares
 Debentures
 Chit Funds
Bank Deposit
Bank deposits are made by the depositors mainly with a view to earn
steady interest on the deposit. Bank deposits are of various kinds such as
saving deposit, fixed deposit, and recurring deposits etc..
Bank deposits have played significance role in garnering saving of the people
particularly after the nationalization. Most of the people are interested to
deposit their money in banks for safety and convenience. Now on a day people
prefer for safety rather than income, banks also have expanded tremendously
in the interest rates and introduction of the innovative deposit scheme are
attracting public.

Bank Fixed Deposits

Meaning of fixed deposit
A fixed deposit is secure saving option combined with a steady growth

safety of the principal. If investment is high and the rate of return (yield) is
fixed. If you prefer a low risk investment, this is an excellent investment
option.
FD options are available with bank as well as other companies at

deferring rates of interest, and with the deferring rates of safety rating as well.
Some banks also have an automatic transfer system.
How to Select a FD?
Check the rate of interest on FD
Look at the rating on the FD even if the rates of interest on FD may be high
you may want to invest your money in an instrument that is safer.
See what are the tenures offered for investment they may vary from 15 days
up to 10 years.
Check what the minimum amount that needs to be deposited.
Check if auto renewal is also provided.
Tradition FD:-
The interest on this will be credited to your savings accounts at fixed

time frames, monthly, quarterly, half yearly or annually. You can decide this
time frame in consultation with your bank.

Cumulative FD:-
The interest is not credited to your savings accounts but reinvested.

Hence you can avail of the power of compounding. Compounding takes place
when the return on your investment starts earnings returns on their own.
Option for traditional FD is only if you need the finds inflow of at regular
intervals. If not and you have steady flow of income go for the cumulative FD.
Shares
Meaning of Shares:-
An interest having a money value and made up of diverse rights

specified under articles of association.
A share is evidence by a share certificate. A share certificate is issued by

a company under its common seal.
A share is the interest of a shareholder in company. The capital of

company is divided into certain indivisible units of a fixed amount. These
units are called Shares. Share means share in the share capital of the company.
Types of Share:-
 Equity Shares
 Preference Shares
Equity Share:-
Equity Shares also called as ownership Shares, which do not enjoy any
preferential rights either in respect of the payment divided or in respect of
the re-payment of capital at the time of winding up of the company. The
holders of these Shares are the real owners of the company.

Preference Shares:-
Preference shares are shares which have preferential rights that is First
priority or preference over other kinds of shares in respect of payment of
divided during the existence of the company and also in respect of
repayment or refund of share capital in the event of the winding up of
company, the share are known as preference shares.
Types of Preference Shares:-
 Cumulative Preference Shares.

 Non-Cumulative Preference Shares.
 Participating Preference Shares.
 Non-Participating Preference Shares.
 Convertible Preference Shares.
 Non-Convertible Preference Shares.
 Redeemable Preference Shares.
Debentures
The term Debenture is derived from the Latin word ‘Debere’ meaning
‘to owe’. So literally debenture means a document acknowledging a debt.
Debenture signifies an instrument under seal evidencing a debt the

essence of its being the admission of in debit nets.
Debenture is an instrument issued by a company under its common

seal, acknowledging a debt to some person and containing an undertaking to
repay the debt after a specified date or a particular date or at the option of the
company and to pay interest at a fixed rate and at regular intervals.

Kinds of Debentures:-
Debenture is of many kinds they are:-
From the point of view of transferability debentures may be classified in to 2

types:-
Simple, Naked or Unsecured Debenture:-
Simple debentures are those which are issued with a mere promise to
pay the interest and to repay the interest and to pay the principal without any
charge on the assets of the company.
Mortgage or secure Debentures:-
Secured Debentures are those debentures which are secured by a

charge on the assets of the company. The charge may be or specified or a
floating charge.
From the point of view of redemption debentures may be divided into two
classes:-
Redeemable Debentures:-
Redeemable debentures are those debentures which are repayable on a

certain date or after a specified period.
Irredeemable Debentures:-
The term irredeemable Debentures mean that there is no time or

specified or fixed for the repayment of these debentures. The holders of these
Debentures cannot demand the repayment.

From the point of view of their convertibility Debentures may be classified
into two kinds:-
Convertibility Debentures:-
Convertibility Debenture are those debentures, in an option is given to

the holders to convert them into preference shares or equity shares after a
specified period, say after 10 years or 15 years.
Non-Convertibility Debentures:-
Non-Convertibility Debentures are those, which are not convertible into

preference shares or equity shares at the options of the debentures holders.
Chit Funds
Chit fund are those, where people invest money in a company auctions
are held every month, as there will be competition among the investors for
withdrawal of money, for their needs so investors go for more amount of
auction. The investors get the chit funds and they have to pay the amount on
monthly basis, which depend upon the chit value. Where the company collects
from the remaining investors, and pay for the person who has auctioned it.

Data Analysis
And
Interpretation

Table 1:- Showing the occupation of respondent.
Occupation No. Of respondents Percentage

Professional 8 16
Business 10 20
Service 19 38
Agriculture 2 4
Retired 6 12
Others 5 10
Total 50 100
Professional
Buisiness
Service
Agriculture
Retired
others
Interpretation
Majority of the respondents are service oriented amounting to so to38%
so that the mutual fund companies should try to concentrate more on this
segment and try to attract the other categories such as professional, business,
agriculture, retired, and others as they are accounting for just 20% and 16%

Table 2 showing income level of respondent.
Income No. Of respondents Percentage

5000-10000 21 42
10000-15000 13 26
15000-20000 11 22
20000-25000 5 10
Total 50 100
50000-10000
10000-15000
15000-20000
20000-25000
Interpretation
The affordability to invest depends on the income of people. As income
depicts the status of the people to invest in different avenues based on their
income many investors fall in the income level between 5000-10000 the register
for 42% the income level 10000-15000 are 26% the income level between 15000-
20000 the high income level above 20000 accounting for 10%.

Table 3 showing the investors investing different avenues.
Avenues No. Of respondents Percentage

Bank deposits 17 34
Mutual funds 6 12
Shares 10 20
Debentures 2 4
Bank fixed Deposits 8 16
Chit funds 7 14
Total 50 100
bank deposit
mutual fund
shares
debentures
bank fixed deposit
chit funds
Interpretation:-
The above table depict that 34% of respondents prefer to invest
in bank deposit due to safety 20% shares 16% in bank fixed deposit, 14% in chit
funds, 12% in mutual funds and 4% in debentures.

Table 4 showing the regular investors .
Pattern No. Of respondents Percentage

Yes 26 52
No 24 48
total 50 100
yes
no
Interpretation:-
The above table that around 52% of the respondents invest
regularly and 48% invest occasionally.

Table 5 showing the regular investors .
Invest Pattern No. Of respondents Percentage

Short - term 19 38
Long – term 31 62
Total 50 100
Sales
short term
long term
Interpretation:-
The above table shows that around 62% the respondents prefer
for long-term investment and 38% for short-term investment.

Table 6 showing source of information.
Source if information No. Of respondents Percentage

Expert/professional 9 18
Own experience 37 74
Existing investors 4 8
Total 50 100
experts/professional
own experience
existing investores
Interpretation:-
Source of information plays a key role in investing in a particular
avenue the above table shows that shows that 74% of the respondents have
invested by their own experience, 18% of the respondents invested by the
experts/professional and 8% of the respondents invested by the guidance given
by existing investors.

Table 7 showing the factors influencing investment.
Factors No. Of respondents Percentage

Convenience 12 24
Safety 19 38
Income 12 24
Rate of 4 8
interest/preference
Tax benefits 3 6
Total 50 100
convenience
safety
income
rate of
interest/preference
tax benfits
Interpretation:-
The above table shows that most of the investors about 38% invest
for the purpose of safety followed by 24% convenience and income and rest for
rate of interest/preference and tax benefits that 8% and 6% respectively.

Table 8 showing the investment in mutual funds.
Investment in No. Of respondents Percentage

mutual funds
Yes 6 12
No 44 88
total 50 100
Sales
yes
no
Interpretation:-
The above table depict that 88% of the respondents are not satisfied
with the returns on mutual fund and only 12% of the respondents are satisfied
with return on mutual funds.

Table 9 showing overall performance of mutual funds.

Attributes No. Of respondents Percentage
Very good 2 4
Good 20 40
Average 28 56
Total 50 100
very good
good
average
Interpretation:-
The above table depicts that the performance of the mutual
funds is average to 56% of the respondents, good to 40% of the respondents and
very good to only 4% of the respondents.

Findings

FINDINGS
 Majority of respondent are from services sector followed by

businessman, the professional, retired people and other.
 Nearly half of the respondent is in the income range of 5000-10000,

around 10 to 5% of the respondents from higher income group.
 Majority of respondent neglect the mutual funds, debentures, bank fixed

deposits and chit funds.
 Half of the respondents are regular investor.
 Many respondents prefer the long term investment.
 Source of information plays a key role in inverting an avenue, majority

of respondents follow their own experience.
 Majority of respondents must consider the safety and income.
 Most of the people are investing in avenues due to risk involved in

mutual funds.
 The overall performance of mutual funds is average compare to other

avenues.

SUGESSTIONS
 There should be awareness created to know about the Mutual Funds

and some tools should be used to convince to invest in Mutual Funds.
 To provide good services at the time of redemption of the money.
 The investor is not having any knowledge about Mutual Funds. So the
company should tell them and they may be ready to invest their money
in Mutual Funds.
 The company can increase its market in the areas of Mutual Funds also.
It can be done through targeting the equity market customers and
convincing them to invest in Mutual Funds also.

CONCLUSION
 In the study there is a general lack of complete knowledge about mutual

funds.
 A mutual fund brings peoples together and it’ll make a group of people
and invest their money in stock, bonds, and other securities.
 The advantages of mutual funds are professional management,

diversification, low cost, regulatory oversight and liquidity.
 The disadvantages of mutual funds are no guarantees, fees and

commission, possible tax consequences, and the inability of
management to guarantee a superior return.
 In this report here we can say that there is a lack of knowledge towards
the Mutual Funds in stock market.
 Most of the investors thought that Mutual Funds are one-way ticket to a
jackpot but it is not so……

BIBLIOGRAPHY
 Mutual benefits magazines.
 Financial markets and services by Natarajan and Gordon.
 Internet.
 Information from Branch Manager.
 Direct interaction with the investor.
 www.karvy.com
 www.moneycontrol.com
 www.mutualfundsindia.com
 www.bseindia.com
 www.nseindia.com
 www.karvymfs.com
The End

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KARVY STOCK BROKING LTD

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 1

OBJECTIVE OF THE STUDY

 To know the attitude of investors towards Mutual Funds & other

 To know the advantages and dis-advantages of Mutual Funds.

 To come up with the awareness of Mutual Funds.

 To understand about the future Mutual Funds.

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 2

 Interaction with the Branch Manager and staff Stock Broking

 From the Internet and Magazines.

Limitations of the Study:-

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 3

Economic Liberalization has accelerated the pace of development in the

Over the years as investment in securities gathered momentum and the

A portfolio is a group of securities held together as an investment. By

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 4

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 5

SECURITIES MARKET IN INDIA

Globally, there are increased evidences to suggest that investor confidence

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 6

These intermediaries pack and unpack securities to help both the

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 7

EQUITY CULTURE IN THE INDIAN FINANACIAL SYSTEM

A near continuous valuation of companies as reflected in share

Stock market promoter’s growth through the creation of liquidity. Many

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 8

STOCK EXCHANGE IN INDIA

FUNCTIONS OF STOCK MARKET

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 9

NATIONAL STOCK EXCHANGE

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 10

The logo of the NSE symbolizes nationwide securities trading facilities

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 11

 Punjab National Bank.

The Main Objectives of NSE As follows

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 12

Screen Based Trading

Non Disclosure of the Trading Member’s Identity

Effective Settlement of Corporate Benefits

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 13

Quick Clearing and Settlement

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 14

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 15

Karvy – Early Days:-

K – Mr. Krishna Prasad

R- Mr. Radha Krishna

V- Mr. Venkat Krishna

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 16

Strength to Strength ….. To better its services, to provide new ones, to

GROWTH AND DEVELOPMENT OF KARVY

Their highly qualified manpower, cutting-edge technology, comprehensive

With the experience of years of holistic financial behind us and years of

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 17

AT PRESENT STATUS OF KARVY

KARVY as covering the spectrum of financial services such as stock Broking

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 18

MILE STONES OF KARVY

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 19

Why should Investors choose for KARVY …?

Excellence is next to nothing and here at Karvy everybody tries to offer

2. Longer volume processing capability:- Being the largest financial service

KUMUDBEN DARBAR BBA/BCA COLLEGE, BIJAPUR 20

4. Expertise in coordinating Multi-location Responses:- Karvy has got a