SUMMER INTERNSHIP REPORT

ON

“ACTIVITY MANAGEMENT AT BSE BROKERS’ FORUM AND

RESEARCH ON MUTUAL FUND VS FII IN INDIAN STOCK MARKET”

BY
Pooja Kumbhani (17BSP1889)
IBS Pune PGPM 2017-2019

Bombay Stock Exchange Brokers’ Forum

 A REPORT
ON
“ACTIVITY MANAGEMENT AT BSE BROKERS’ FORUM AND
RESEARCH ON MUTUAL FUND VS FII IN INDIAN STOCK MARKET”

Submitted by:
Pooja Kumbhani (17BSP1889)
IBS Pune PGPM 2017-2019
Name of the Organization: Bombay Stock Exchange Brokers’ Forum

A report is submitted in partial fulfilment of the requirements of PGPM

program of IBS Pune.

Company guide: Dr. Aditya Srinivas Faculty guide: Prof. Soumitra Samaddar
(COO. & Chief Economist) (Faculty of IBS Pune)
Date of submission: 23th May 2018
 Authorization

This is to certify that the project entitled “ACTIVITY MANAGEMENT AT BSE BROKERS’ FORUM AND RESEARCH
ON MUTUAL FUND VS FII IN INDIAN STOCK MARKET” which shows the integrity of organization and research
based on capital market for the formation of policy and white paper working which was carried out by POOJA
KUMBHANI at Bombay Stock Exchange Brokers’ Forum, in partial fulfilment of the requirements of PGPM
Program to be awarded by IBS PUNE. This work was been carried out under supervision of Dr. Aditya Srinivas,
COO. & Chief Economist.
The work is found to be of standard required for Summer Internship Project of PGPM curriculum and has been
submitted to Prof. Soumitra Samaddar, Faculty Guide.

Dr. Aditya Srinivas Prof. Soumitra Samddar

COO. & Chief Economist Faculty Member
Bombay Stock Exchange Brokers’ Forum IBS PUNE

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 Acknowledgement

A summer internship project is a golden opportunity for learning and self-development. I consider myself to be
very lucky and it is indeed a pleasure for me to express my sincere gratitude to those who lead me through in
completion of this project.
I express my gratitude to Bombay Stock Exchange Brokers’ Forum for giving me this opportunity and to gain
valuable learning experience to apply in my future work life. I am also deeply grateful to entire management
team of IBS, Pune for letting me dirty my hands on a practical aspect of corporate life.
I express my thankfulness to Dr. Aditya Srinivas (COO. & Chief Economist), for providing me an opportunity to
work with this prestigious organization.

I would like to thank Dr. Vispi Rusi Bhathena (CEO) for supporting and motivating me throughout the project
and to all my fellow colleagues and senior employees too, for being an immense help to me in this project. All
of us have together worked towards the common organizational objective, shared our experiences and aided
each other in times of need.
I express my deepest thanks to Prof. Soumitra Samaddar (faculty member of IBS Pune), who has been ready
to help me at any point, inspite of having busy schedule. He has been a constant motivator as well as a good
mentor in all time when I needed and gave me right direction towards completion of my project.
Last not but the least, I would also like to thanks to my parents, family and friends and also to all those who
have helped me directly or indirectly in completing my Summer Internship.

POOJA KUMBHANI
17BSP1889
ICFAI BUSINESS SCHOOL PUNE

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 DECLARATION

I hereby declare that this Project is a record of original work done by me. The results exist in this report have
not been submitted to any other University or Institute for the award of any Degree or Diploma.

The Findings and Conclusions of this Report are based on my Personal Study and Experience, and are conducted
under the guidance of Dr. Aditya Srinivas (COO. & Chief Economist).

This report is submitted in Partial Fulfilment of the requirement of PGPM Program of IBS PUNE. Information
contained in this Project Report is deemed to have been obtained from sources believed to be reliable. However,
neither Bombay Stock Exchange Brokers’ Forum, IBS nor I, make any Representation, Warranty or Guarantee on
the accuracy and completeness of the information given here and cannot be held responsible for any loss or
damage caused directly or indirectly by any Events, Action, or blunders arising from the use of this information.

POOJA KUMBHANI
17BSP1889
ICFAI BUSINESS SCHOOL PUNE

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 Executive summary

This internship is an attempt to know how theories can be applied to practical situations. As a student of PGPM
it is a part of study for everyone to undergo Summer Internship Program at some good organization to get an
insight of Corporate World. For this purpose I get the opportunity of summer training at Bombay Stock Exchange
Brokers’ Forum (BBF). While pursuing a career in Finance-Marketing, BBF is a great platform to learn Finance
and Market research with the understanding of investing in various financial instruments, methodologies,
specialisms and points of view that seamlessly fuse to give us domain knowledge and complete assimilation of
Indian Stock Market.

The project on Activity management at BSE Brokers’ Forum and Research on Mutual Fund vs. Foreign
Institutional Investors (FII) in Indian Stock Market is a learning in the real world of Finance. I have worked for
the activities of organization like Membership program, event management and data mining. Research on the
Micro Small and Medium Enterprises (MSME) listed on the EMERGE platform of NSE to understand the
competitive side of scope for investing in the emerging corporates of the country.

Information related to the Mutual Fund and FII is gathered along with the flows through primary and secondary
sources. The analysis of the data is done up to the understanding of correlation between the Mutual fund and
FII flow and the hypothesis testing of net investment by FII, MF, SENSEX and Nifty.
Regression model for Nifty and SENSEX is derived from the research on secondary data and a survey based on
Brokers and Sub-brokers opinion is been considered to understand the necessity of the flows in the economy.
The analysis have shown a high volatility of FII in the markets where as MF increasing consecutively since last 2
years stabilizing the economy.

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5
 Table of content
1. Authorization...............................................................................................................
2. Acknowledgement………………………………………………………………………………………………….
3. Declaration…………………………………………………………………………………………………………….
4. Executive Summary………………………………………………………………………………………………..
5. Chapter 1 - Introduction
1.1 About Indian Stock Market
1.1.1 Classification of Capital Market……………………………………………………...1
1.1.2 Stock rallies in Indian Economy……………………………………………………….3
1.1.3 Outlook on Market and Economy……………………………………………………4
1.1.4 Mutual Fund in Indian Stock Market……………………………………………….5
1.1.5 Foreign Institution Investors in Indian Stock Market……………………….7

1.2 About Bombay Stock Exchange Brokers’ Forum

1.2.1 History…………………………………………………………………………………………….9
1.2.2 Company Vision…………………………………………………………………………..…10
1.2.3 Competitor in the market…………………………………………………………..….10
1.2.4 SWOT Analysis……………………………………………………………………………….11

6. Chapter 2 - Project Description

2.1 Objective & Scope of the study
2.1.1 Objective……………………………………………………………………………………….12
2.1.2 Scope………………………………………………………………………………………….….12
2.2 Contribution to the organization………………………………………………………………….....13
2.3 Research on Impact of Mutual Fund vs. FII on Indian stock market………………….13
2.4 Understanding of NSE Emerge platform…………………………………………………………..14
2.5 Limitations of the study…………………………………………………………………………………...17

7. Chapter 3 - Investors Awareness on MF and FII……………………………………………………..18

8. Chapter 4 - Mutual Fund vs. FII in Indian stock market

4.1 Literature Review………………………………………………………………………………………………22
4.3 Grounds of Comparison…………………………………………………………………………………….23
4.3 Research Methodology……………………………………………………………………………………..24
4.4 Data Analysis
4.4.1 Statistical analysis of secondary data……………………………………………….25
4.4.2 Hypothesis……………………………………………………………………………………….29
4.4.3 Empirical Analysis…………………………………………………………………………….30
4.4.4 Brokers perception on MF and FII……………………………………………………32
9. Chapter 5 - Findings of the study……………………………………………………………………………34

10. Chapter 6 - Suggestions and Conclusions

6.1 Suggestions……………………………………………………………………………………………………...35
6.2 Conclusions………………………………………………………………………………………………………36

11. Chapter 7 – Annexure

Annexure 1 - Questionnaire of Public Survey…............................................................37
Annexure 3 - Questionnaire of Brokers survey………………………………………………………..39
Annexure 3 - References & Websites………………………………………………………………………41
Annexure 4 - List of Abbreviations…………………………………………………………………………..43
 Chapter 1
INTRODUCTION

1.1 About Indian Stock Market

Indian stock market gives a platform for buyers and sellers of stocks which represents ownership
claims on businesses; these may include securities listed on public stock exchange like National
Stock Exchange (NSE) and Bombay Stock Exchange (BSE). Initially there were 23 regional stock
exchanges in India, but today only NSE and BSE are national level exchanges with 1400 active
brokers and 70000 sub brokers in the market. Indian markets are moreover controlled by Foreign
Institutional Investors and followed by Mutual Fund to decide the price of a share in the market.

1.1.1 Classification of Capital Market

Capital market is a market for long term sources of funds raised by the company through equity
and debt instruments. The Equity shares are those where there is no liability of the company to
repay the amount unless the company gets winding up order and there is no liability to pay
dividends also. This is the best form of capital, a company would like to raise. Preference shares
have fixed dividend and the capital taken by the company has to be repaid back at the end of
maturity. Bonds and Debentures are debt instruments and fixed interest is to be paid on them
by the company issuing these instruments. If the company fails to repay the interest or principal
amount, then the bond and debenture holders gets the legal right to initiate the winding up of
the company.

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 Primary Market
IPO & FPO
• The company for the first time goes under Initial Public Offer to public for raising the money
and it is called as ownership money.
• Merchant Banker plays a vital role for company to raise the mony from market.
• FPO refers to Follow on Public Offer for the companies already listed and going for second
time to raise money.

Secondary Market
BSE & NSE
• It is also referred to as the stock market. It is the market where the companies are listed on
the stock exchanges.
• In India the prominent ones are BSE and NSE where the companies are listed. BSE has 5174
companies listed while NSE has around 2200 listed companies.

Commodity
Market MCX & NCDEX
• In MCX market, bullion (gold and silver), metals and energy (crude oil and natural gas) are
dealt with.
• In NCDEX the agriculture commodities are traded. There are both types of settlement that is
cash and physical delivery also.
• The commodities market is affected by the international markets and by international
factors.

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1.1.2 Stock rallies in Indian economy
The stock market rally refers to continuous rise in the prices of shares. After 1990s new liberal
economic policy there have been 4 major stock market rallies in India that has been mention
below:
i. In the year 1992 Harshad Mehta scam took place; Rs.5000 crore money of investors was
lost and market was affected during the period of1992-96 with a bear phase.

ii. In the year 1996 Ketan Parekh (K10 scam) was constituted with around Rs.40000 crore
where stocks of 10 companies were manipulated including DSK software, Pantamedia,
Silverline were the major companies targeted.

iii. During 2003-2007 It was a combination of fundamentals and liquidity. This rally was
started with Maruti IPO in 2003. The year 2007 is known as golden year in Indian economy
where FIIs invested 70000cr in Indian stock market and GDP of the country had touched
9.3% highest ever. The corporate earnings were at 20% in this year and $1=Rs.38/- Key
point is that, the domestic participation was less and was mainly controlled by FII.

iv. On 26th May 2014 when Narendra Modi government was appointed; Mutual funds have
outperformed FII for the first time in the history of Indian Stock Market. Monthly 5000cr
of SIP money coming into Indian stock market – as backbone of Indian stock market due
to retail investors. In March 2018 the SIP inflow touched Rs.7119 crore which is highest
ever monthly SIP inflow.

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1.1.2 Outlook on market and economy
Our economy is analyzed on 6 macroeconomic parameters that decides the growth of our
country and gives the outlook of market from the core.
1. GDP growth – The most important factor to identify the growth of an economy where
India’s current GDP is 7.2% which has made our country again fastest growing
economy by beating the expectation of 6.9% in the year 2017. We ranked 10th in the
GDP Contribution of world average at 3.1%.

2. Consumer Price Index Inflation measures price change from the perspective of
purchaser in consumer goods and services. Current CPI inflation is 4.28% which is
below the RBI target of 5%, this means RBI will not increase interest rates in near
future and it is very positive for stock market to boom.

3. Current Account Deficit – The largest component of our Current Account Deficit is
Trade deficit where Imports are higher than exports of economy. It is mainly because
of 77% of Oil is imported and 850tonnes of Gold imported by us which is highest in
the world. In 2014 price of oil was $110 per barrel, in 2016 it came down to $29 per
barrel and in 2018 trying to stabilize at $74 per barrel. For India oil price above $85
per barrel is a problem due to its direct connectivity with retail inflation. Rise in price
of crude oil leads to a rise in retail inflation.

4. Fiscal Deficit – It is the difference between government income and government

expenditure where India’s fiscal deficit is 3.5% and International target is 3%. It is the
key indicator for Foreign Institutional Investors to invest in our country; if the fiscal
deficit goes up FII’s pull out there capital and market goes down.

5. Index of Industrial Production – IIP data tracks demand in manufacturing segments

and it is released every 2 months. In the current situation it is 7.1% and if IIP data rises
it is positive for the growth of economy and vice-a-verse.

6. Monsoon – India being an agricultural economy 71% of population are still living in
rural area and 29% in Urban. Due to development in agricultural sector 35% gets
irrigation facility but 65% of remaining agricultural land is still dependent on Monsoon
in our country. Increase in agricultural production will show a balanced demand and
low CPI inflation that is best for an economic growth.

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1.1.4 Mutual Funds in Indian stock market
Mutual Funds are indirect route of investment in to the stock market. They are SEBI registered
entities who invest the money collected from the unit holders into the stock market as per their
mandate. The mutual fund industry in India started in 1963 with the formation of Unit Trust India
(UTI) at the initiative of the Reserve Bank of India (RBI) and the Government of India. There are
43 Mutual Fund and more than 2000 primary mutual fund schemes in India. Average Assets
Under Management (AAUM) of Indian Mutual Fund Industry for the month of March 2018 stood
at Rs.22.71 lakh crore.

The objective was to attract small investors and introduce them to market investments. Since
then, the history of mutual funds in India can be broadly interpret into six distinct phases
explained in the report.

Phase 1: 1964-1987 Growth of UTI

Launch of Unit scheme 1964 by UTI, a setup of Reserve Bank of India (RBI). Later in 1971 Unit
Linked Insurance Plan (ULIP) was launched as a first Indian offshore fund and many innovative
schemes were offered to suit the needs of different classes of investors, it had grown 10 times
(Rs.600 crores to Rs.6700 crores) by the year 1987.

Phase 2: 1987-1993 Entry of Public Sector Funds

This year was remarkable as entry of other public sector mutual funds with opening up of the
economy, many public sector banks and institutions were allowed to establish mutual funds. The
Asset Under Management during this period increased by nearly 7 times. (Rs.6700 crores to
Rs.47004 crores)

Phase 3: 1993-1996 Emergence of Private Funds

In the year 1993 new era began with the permission granted for the entry of private sector funds
that gave the Indian investors broader choice of funds and increasing competition to the existing
public sector funds. They have brought in with latest product innovations, investment
management techniques and investor-servicing technologies.

Phase 4: 1996-1999 Growth and SEBI regulation

A of regulatory body was introduced with SEBI (Mutual Fund) Regulations, 1996. In 1999 the
budget of the Union government took a step in exempting all mutual fund dividends from income
tax in the hands of investors. Both SEBI and AMFI launched Investor Awareness Program aiming
to educate investors about investing through Mutual Funds.

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 Phase 5: 1999-2004 Emergence of a large and Uniform Industry

This is the phase of significant growth in terms of amount mobilized from investors and asset
under management. In February 2003, the UTI Act was repealed and has no longer a special legal
status as a trust established by an act of Parliament.

Phase 6: 2004 Onwards Consolidation and Growth

The size of industry by this time has doubled in terms of AUM which have gone from Rs.68,000
crore to over Rs.1,50,000 crores. It has witnessed a spate of mergers and acquisitions and
international players continued to enter India including Fidelity, one of the largest fund in the
world.
Mutual Fund investments in stocks, bonds and other instruments require considerable expertise
and constant supervision, to allow an investor to take the right decisions. But small investors
usually do not have necessary expertise and time to undertake any study that can facilitate
informed decisions, rather attain the benefits of diversified investment, Professional
management, Liquidity, Good returns, flexibility and proper regulation from mutual fund
services.

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1.1.5 Foreign Institutional Investors in Indian stock market
Foreign Institutional Investor is a body or group of investors incorporated outside India,
registered under the Securities and Exchange Board of India Regulations, 1995; which proposes
to make investment in Indian securities. Being one of the fastest growing economies since last
few years, India has witnessed a large amount of foreign investment in various sectors. The
government has formulated its policy aiming towards attracting more and more funds
considering the domestic business concerns simultaneously. FIIs were permitted to invest in
Indian financial instruments from September 14, 1992.

FIIs held the highest stake in ownership of shares in the various sectors like 23.35 percent in the
finance sector, followed by information technology and banking as 21.16 percent and 17.62
percent, respectively. The total percentage of shares held by FIIs across different sectors was
10.32 percent of the total shares of the companies listed on the NSE as at the end of March 2011,
which stood at 10.45 percent at the end of September 2011.
FIIs net investments in Indian equities and debt stood at US$ 7.46 billion in 2016-17, they have
put in over $200 billion in India’s equity market. In spite of this, 80% stocks are still owned by
Indian’s which makes them more influential.
Chart 1: Sector wise stake of FIIs

As service sector is known to be the key driver of India’s economic growth; FIIs are likely to invest
more in service sector based on financials and non-financial both with the holding of 29.23% of
stake. The other major stake that FIIs hold in our country are Telecommunication, Automobile,
Power & Oil, etc.

7
The phenomenon of FII activity in Indian stock market has both the sides of advantages and
disadvantages in the economy.

ADVANTAGES DISADVANTAGES
Enhanced Flow of Equity Capital: Potential Capital Outflows:
Foreign Institutional Investors have a greater Funds are refer as HOT MONEY that are
appetite for equity than debt in their asset controlled by investors who actively seek
structure. Opening up the economy to FIIs short-term returns. Hot money can have
has been in line with the accepted economic and financial repercussions on
preference for non-debt creating foreign countries and banks. When money is injected
inflows over foreign debt. Enhanced flow of in a country, the exchange rate for the
equity capital helps improve capital country receiving the money strengthens,
structures and contributes towards building while the exchange rate for the country
the investment gap investing the money weakens. If money is
withdrawn on short notice, the banking
institution of the recipient country will
experience shortage of funds.
Managing Uncertainty and Controlling Risk: Inflation:
They promote financial innovation and FII inflow into the country is in huge amount
development of hedging instruments. These that creates a lot of demand for rupee and
because of their interest in hedging risks, are the RBI pumps the amount of Rupee in the
known to have contributed to the market to meet the demand created. This
development of zero-coupon bonds and situation leads to excess money flow in the
index futures economy thereby leading to inflation where
too much money chases too few goods.

Improving Capital Markets: Problem to Small Investors:

By increasing the availability of riskier long
term capital for projects, and increasing
firm’s incentives to supply more information
about them, the FIIs can help in the process
of economic development.
Improved Corporate Governance:
FIIs constitute professional bodies of asset
managers and financial analysts, who, by
contributing to better understanding of
firms’ operations, improve corporate
governance.
The FII buying pushes the stocks up and their
selling pushes stock market on the downward
path. This creates problems for the small
investor, whose fortunes get driven by the
actions of the large FIIs.
Adverse Impact on Exports:
FII flows leading to appreciation of the
currency may lead to the exports industry
becoming uncompetitive due to the
appreciation of the rupee.

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1.2 About Bombay Stock Exchange Brokers’ Forum
1.2.1 History
Bombay Stock Exchange Ltd. was established in the year 1875 (initially named as The Native Share
and Stock Brokers’ Association) dedicated to facilitate the growth of Indian corporate sector by
providing it an efficient capital raising platform over the past 143 years. It has 1392 main brokers
and 70000 sub brokers, with 5174 listed companies and probably being the only exchange that
was formed and managed by brokers for over 125 years which makes BSE second largest
exchange of Asia in terms of listed companies. India INX, India’s 1st international exchange
located at GIFT City IFSC Ahmedabad is also a fully owned subsidiary of BSE.

In India NSE and BSE are the only leading stock exchange where NSE is the youngest one and
came into existence as a Tax paying company in 1992 which later on registered as a Stock
Exchange in the year 1993 under the Securities Contract Regulation Act,1956. The Index of both
Stock Exchange are referred as Barometers of Indian economy where BSE’s index is known by
SENSEX (Sensitive Index) introduced in the year 1986 which shows top 30 trading companies
whereas NSE’s index is Known as NIFTY (National Fifty) introduced in the year 1996 that shows
top 50 trading companies. Both the competitors play a vital role in the reformation of Capital
Market of India. Millions of investors and brokers transact on daily basis through these trade
exchanges and recognized by the Securities and Exchange Board of India (SEBI)

The Bombay Stock Exchange Brokers Forum, has been a part of BSE ltd. since 1993 for the
development of the financial markets and its members. It is a not-for-profit body registered
under the Societies 1870, consisting of around 900 members being members of Stock Exchanges
(BSE/NSE), Commodity Exchanges (MCX/NCDEX) and Depository Participants of Depositories
(CDSL/ NSDL). The objective of the FORUM is to highlight the concerns of the member brokers to
Regulators (SEBI & RBI) and Exchanges (NSE & BSE) The core activities of the organization include:

1. Representation to Regulators.
2. Seminars for member brokers.
3. Investor Awareness program.
4. Global Connect Tour.
5. Handling Member Grievances.

The forum derives its strength from its membership base; larger the base more is the recognition
vice a verse the regulators & the authorities.
On regular basis they interacts and represents the members in front of the regulator, stock
exchanges, depositories and other financial institutions. They tries to work closely on policy
issues affecting the capital market and the members by actively interacting, giving presentations
and meeting with government officials. It is acting as a facilitator in filling the gaps so that the
business may shore up their competitiveness and enhance their global reach.

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1.2.2 Company Vision

To provide feedback to the authorities in

practical issues with the implementation of
law

To give policy feedback at the time of law

creation to balance ensure easy
implementation of law

To guide the members and strive to ensure that

non-compliances due to ignorance be reduced
to the greatest possible extent.

1.2.3 Competitor in the market

BSE has its only competitor in the market as NSE and the competition of BSE Brokers’ Forum lies
with in this with ANMI the Association of National Stock Exchange Members of India. The basic
objective and working of the organization is very similar to BSE Brokers’ Forum.

It was the third year of BBF in 1996 and ANMI was established under the Indian Companies Act,
1956 for the development of Capital market and its members. It is a pan India body comprising
of the trading members across country of National Stock Exchange of India Limited (NSEIL),
Bombay Stock Exchange (BSE) and other exchanges having national presence.

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1.2.4 SWOT Analysis

The forum derives its STRENGTH Highly unstructured with highly

from its membership base; larger leveraged job responsibilities
the base more is the recognition creating dissonance among the
vice a verse the regulators & the employees shows the WEAKNESS
authorities. of forum.

With the programs of educating

its members by conducting THREAT of the forum is reduction
seminars, issuance of circulars
in brand equity due to the
and conducting camps they get
competitor like ANMI attracting
an OPPORTUNITY to work with
maximum trading members.
SEBI and RBI with capital market
related policies.

11
 Chapter 2
Project Description

2.1 Objective & Scope of the project

2.1.1 Objective
While pursuing a career in Finance-Marketing, BBF is a great platform to learn Finance and
Market research with the understanding of investing in various financial instruments,
methodologies, specialisms and points of view that seamlessly fuse to give us domain knowledge
and complete assimilation of Indian Stock Market. During the internship multi number of task is
given at the same time, for example; actively participating in membership activity, conducting
research that would be beneficial as input in policy formulation related to Capital Market for the
organization as well as to SEBI.
Following are the objectives of the project:

1. To analyze the flow of Mutual Fund vs. FII and their impact on Indian Stock Market by
empirical research.

2. Give inputs to the organization in preparing quality white papers that will help in policy
formulation and providing inputs to SEBI in formulating policies related to capital Market.

3. Get an exposure of managing events and seminar, working for membership activity and
Investment awareness program to understand the business.

4. Hands on experience on trading platform and analyzing the risk and returns of investing
into various financial instruments.

2.1.2 Scope
The project scope is discussed below:
Research: The study takes 15 years data into consideration for Mutual fund and FII inflows. To
study the impact of FII on Indian stock market, Nifty and SENSEX returns are selected in the study,
as they are said to be the barometer of the economy and widely used by market participants for
benchmarking.
Activity management in Organization: The project would enable BBF in establishing the
competitive edge and to reach more number of brokers for queries related to trading and
business related activities along with governing bodies like SEBI and RBI.

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2.2 Contribution to the Organization
The project on Activity management at BSE Brokers’ Forum and Research on Mutual Fund vs. FII
in Indian Stock Market is a learning and opportunity to work for the benefit of self-
comprehension and organization as well. Understanding the functions of business by
accomplishing the task assigned like Coordinating with the activities of organization includes
updating members and non-members details through excel, mining database of required bodies
registered under SEBI regulation.

Calling and Promoting for upcoming event name Korea Financial Investment Association (KOFIA)
on 5th July 2018, that is an international conference with Korean delegates looking forward to
invest in Indian Financial Institutions or companies for which many number of Portfolio
Managers, Merchant Bankers and Alternative Investment Funds registered Bodies would be
invited for the conference through the contacts we make.
Due to the large number of data mined the work of communicating with the invitees has been
divided in a team where I up bring my skills in communication and team building with my co-
interns.

2.3 Research on Mutual Fund vs. FII in Indian stock market

A research on Mutual Fund vs. FII in Indian stock market is assigned to find the significant relation
between the investments (MF and FII) as independent variables and market returns (NIFTY and
SENSEX returns) as dependent variables.

Economies like India, which offer relatively higher growth than the developed economies, have
gained favor among investors as attractive investment destinations for foreign institutional
investors (FIIs). Investors are optimistic on India and sentiments are favorable following
government’s announcement of a series of reform measures in recent months. India is the third
largest start-up base in the world with more than 4,750 technology start-ups, and about 1,400
new start-ups being founded in 2016.

Focus on offshore funds and exchange traded funds (ETFs) witnessed net inflows of $565 million
in November and helped the overall tally to reach nearly $6.5 billion in 2017. Equity mutual funds
recorded the 17th straight month of net inflows with record Rs20,362 crore inflows in August
2017 on account of rally in Indian stock markets. Equity funds received an inflow of Rs2.86 trillion
from November 2016 to October 2017. The total market capitalization (M-cap) of all the
companies listed on Bombay Stock Exchange (BSE) rose to record high level of Rs.146 trillion on
November 19, 2017 backed by positive sentiment in the broader market.
Information related to the Mutual Fund and FII is gathered along with the flows through primary
and secondary sources and analysis of the data is done and explained in chapter.3 for depth of
the project.

13
2.4 Understanding of NSE Emerge platform
Micro Small and Medium Enterprises (MSME) has been proved to be a backbone of Indian
economy by playing an important role in socio-economic development of the country. The
MSMED Act, 2006 defines the Micro, Small and Medium Enterprises based

1) On the investment in plant and machinery for those engaged in manufacturing or

production, processing or preservation of goods and
2) On the investment in equipment for enterprises engaged in providing or rendering
of Services.
The investment in plant and machinery is the original cost excluding land and building and other
items specified by the Ministry of Small Scale Industries vide its notification no. S.O. 1722 (E)
dated 5th October 2006.

The guidelines with regard to investment in plant and machinery or equipment as defined in the
MSMED Act, 2006 are:
Table 1: Investment guidelines as per MSMED Act, 2006.
Nature of Investment in plant and machinery Investment in equipment
activity of the excluding land and building for excluding land and building for
Enterprise enterprises engaged in manufacturing enterprises engaged in providing
or production, processing or or rendering of services (loans up
preservation of goods to Rs.1 crore)

Micro Not exceeding Rs.25.00 Lakhs Not exceeding Rs.10.00 Lakhs

Small More than Rs.25.00 lakhs but does not More than Rs.10.00 lakhs but does
exceed Rs.500.00 lakhs not exceed Rs.200.00 lakhs

Medium More than Rs.500.00 lakhs but does not More than Rs.200.00 lakhs but
exceed Rs.1000.00 lakhs does not exceed Rs.500.00 lakhs

The investment in plant and machinery is the original cost excluding land and building and other
items specified by the Ministry of Small Scale Industries vide its notification.

14
Important institutions dealing with SME’s:
This Ministry is duly assisted in its efforts by Office of the Development Commissioner (MSME).
The Khadi and Village Industries Commission (KVIC);

The Coir Board;

The Mahatma Gandhi Institute for 83 Rural Industrialization (MGIRI);
The National Small Industries Corporation (NSIC) Ltd.
And the three autonomous national level entrepreneurship development/ training institutes,
viz.
a) National Institute for Micro, Small and Medium Enterprises (NI-MSME), Hyderabad;
b) National Institute for Entrepreneurship and Small Business Development (NIESBUD), NOIDA

c) Indian Institute of Entrepreneurship (IIE), Guwahati.

Table 2: Comparison of Emerge vis-à-vis Main Board

Particulars Emerge Main Board

IPO
Track Record Track record of at least 3 years, 3 Years track record of
positive cash profitability
Accruals (EBDT) from operations
for at least
2 financial years and positive net-
worth.
IPO Grading Not mandatory Mandatory
Post-issue paid-up Capital Less than Rs.25 crore Not less than Rs.10 crore
(Face Value)
Minimum number of allottees 50 1000
in the IPO
Observations on DRHP By the Exchange By SEBI
IPO Underwriting 100% underwritten (15% on the Mandatory not required
books of the merchant banker) where 50% of issue
offered for compulsory
subscription by QIBs)
Market Capitalization/ issues No Restriction No Restriction
size
IPO Application size Not less than Rs.1 lakh Rs.5000 – Rs.7000

15
Particulars Emerge Main Board
Post Issue
Reporting Half-yearly Quarterly
requirements(Audited a/c)
Market making Mandatory Not mandatory
Corporate govt. requirements Same as main board Clause 49

16
2.5 Limitations of the study
1. It is important to emphasize that the project is not intended to prove or disprove actual
bias. Rather, the aim is to identify tentative trends in decision making on matters of legal
interpretation.

2. Qualitative variables are affecting more than quantitative variables. Since the sample size
of the survey could not meet the minimum requirement.

3. Project is divide into three different parts which becomes contradictory at times to
manage every activity.

4. Along with research practice the study of historical data is simultaneously very important
for the better flow of project.

5. Due to the accountability of administrative work like data mining for membership activity
and coordinating in event management; the research project have been a different part
from the office hour’s activity sometimes.

17
 Chapter 3
Investors Awareness on MF & FII
A survey of 153 people above 18 years of age was conducted during the period to understand
the spread of the topic in the mind of Investors and other population of the country. From the
survey 69% of the population lies between 18-35 years of age and there were 96 male and 57
female contributed to the survey.
Chart 2: Marital Status

Unmarried 74

Married 79

71 72 73 74 75 76 77 78 79 80

The above chart shows number of Married and Unmarried participants in the survey; this
information was asked to check the liability on investors and an assumption is been made that
maximum of the people investing in the economy has a liability of family to look after.
Chart 3 Chart 4

Education Background Monthly Income

7%
23%
32%

52% 12%
41%

33%

Below 25000 25000 - 75000

Under graduate Post graduate Graduate Above 75000 Unemployed

18
The chart 3 & 4 shows the frequency in Education background and Income of the Investors.
During the survey it was found that many people are only graduate or undergraduate but still
earn Above Rs.25000 a month and some people with graduation are unemployed.

It was found that awareness on Foreign Institutional Investors is not much in the economy based
on smaller data but it is very important to know the concepts of investing in capital markets
including FII for investing in any of the financial instruments. The chart 5 shows the ratio of people
aware about FII in our country.
Chart 5

Awareness about FII

27%

73%

Yes No

There are also people who are graduate and still not aware about Mutual Fund in the economy,
though the ratio is very small and only 8 people out of 153 do not know about MF but the 145
people who know about it are not all investing in MF due to the fear factor of risk in the market
and lack of clearance in concept. The chart 6 shows the number of people aware about MF and
number of people who do not invest in MF.
Chart 6

Investment in MF

Do not invest in MF 49

Aware about MF 145

0 20 40 60 80 100 120 140 160

19
More the number of investors in MF will bring large number of domestic money in the market
and for that early education to the population needs to be provided. This would ensure that
investment culture is developed in young population so when they start their career they start
investing in capital markets. This concept should be introduced in the syllabus right from the
schools and colleges.

This survey has proven that maximum number of information is been provided by the Internet
services and followed by word of mouth. Below mentioned chart 7 shows the marketing power
of MF and FII awareness.
Chart 7

Sources of Awareness
150

100
104
50 68
47 52
0
Newspaper Television Word of mouth Internet

Series1

Chart 8 shows that maximum number of investors preferring to invest in MF through SIP and
currently in India there are 2.16 crore SIP accounts exist through which investors regularly invest
in Indian Mutual Fund schemes. In the year 2017-18 total contribution of SIP into MF is RS. 67,190
crore which is good for our economy. The chart 9 in the chapter shows the reason of investing
into MF through SIP.
Chart 8

Preference of MF

Lumpsum

SIP

0 10 20 30 40 50 60 70 80 90 100

20
 Chart 9

Reason to invest in MF
80
60
59
40 53
20
27 14
0
Best Return Systematic approach to Tax Benefit Liquidity
Investment

21
 Chapter 4
Mutual Fund vs. FII in Indian stock market
4.1 Literature Review
Have gone through the literatures and the analysis of following research papers and journals
mentioned below:

1. Suchismita Bose (2012) suggests that the effect of stock market returns can be
overshadowed by the effect of FII investments, in determining mutual fund flows. The
study also finds evidence of net investments by FIIs having a causal influence on stock
market returns even as it fails to identify any causal relation between domestic mutual
funds’ net investments and domestic stock returns.

2. Ambuja Gupta (2011) the research study indicates that the growing participation of FII in
Indian Stock market had influence on each other however their timing of influence is
different.

3. Journal of Contemporary Research in Management Vol. 7; No. 2 April - June, 2012 shows
the study on impact of foreign institutional investments on the capital market to
understand the substantial effect over the stock indices. They also have the potential of
influencing the process of economic development of India through the positive impacts
on macro- economic fundamentals of the country.

4. Research paper by Mayur Shah analyze the Flow of FII to be advanced significantly in last
13 years from the year 2001 to year 2013 and there is a correlation between such FII flows
and changes in stock market indices like nifty. Due to low R-square means it indicates that
other factors might be contributing towards volatility of Indian stock market. As the
correlation is not found to be strong some other factors can have impact and relations
with stock market.

5. Paramita Mukherjee and Malabika Roy (2016) says that there is an evidence that
institutional investors (both FIIs and domestic MFs) have significant influence on the
Indian equity market return after 2008, though it was not a determinant before 2008.

22
4.2 Grounds of comparison
Research on Mutual Fund vs. FII in Indian Stock Market is a delicacy for analyzing the need in
business for the growth and development of Indian economy with the flow of MF and FII. Being
the powerful bodies, if Mutual Fund and FII invests in any company’s share, the price of that
share goes up due to its dependency on the primary data of that company. Increase in the net
profit of the company leads to increase in the buy of MF and FII which then leads to increase in
share price of that company.

The data of the flow of Mutual Fund and FII have been found in the study from 2003-2017 to find
the significant relation between them due to its reliability on Indian Stock Market.

23
4.3 Research Methodology
The study of this project is done conclusively by using Secondary and Primary data in the
empirical research of Mutual Fund vs. FII in Indian Stock Market.

• Data mining from websites of

Secondary government regulated bodies.
• Literature review
data • Observing Current market scenario

• Investment awareness survey through a

Primary questionnaire
• Understanding Brokers perspective to
data invest in Indian stock market with effect
of MF and FII

4.3.1 Type of Research: This is an empirical and analytical research as it aims to study the
relationship between the selected variables and FII inflows.
4.3.2 Type of data: The objectives of this study are satisfied by collecting and analyzing the
secondary time series data from various sources and primary data from survey of brokers.
4.3.3 Sources of data: The data for this study has been collected from various secondary sources
like websites of BSE, NSE, RBI and SEBI, also from the journal of contemporary Research in
Management, journal of sage pub, and various other sources.
4.3.4 Statistical Tools used: Correlation analysis, Regression Analysis, Frequency Analysis and
Factor Analysis
4.3.5 Period of the study: The study is conducted for a period of fifteen financial years starting
from 2003 to 2017.
4.3.6 Variables used in this study: Foreign Institutional Investment (FII), Mutual Fund (MF), NSE
NIFTY and BSE SENSEX.

24
4.4 Data Analysis
4.4.1 Statistical Analysis of Secondary data

The flow of FIIs and MF have been gathered from 2003-2007 to ascertain the significant relation
between both.

TABLE 3: EQUITY NET. INVESTMENT (RS. CRORE)

YEARS FII Net. Flow MF Net. Flow
2017 53650.27 112049
2016 21398.26 47818
2015 17946.24 71564
2014 97736.08 23326
2013 113026.7 -21188
2012 128360.7 -20593
2011 -2714 6653
2010 133266 -27876
2009 83392.4 -5313
2008 -52986.9 13992
2007 70057.2 6195
2006 36393.1 15225
2005 46711.9 13267
2004 38704.2 -966
2003 30737.1 629

TOTAL 815679.25 234782

From the data of past 15years in the table the average FII inflow is to be found Rs. 54378.61crore
and average Mutual Fund inflow is Rs.15652.13crore.
The correlation between the MF and FII inflows was calculated and it was found that the relation
between them is -0.397984658 which indicates poor correlation in the Indian Stock Market.
In the year 2008 and 2011 the FIIs data show outflow of money which indicates the withdrawal
from the Indian economy. This was the effect of Subprime Crisis (2008) and European Crisis
(2011). Which later affect the Mutual Fund industry in 2009-10 and 2012-13 too.
From 2015 onwards it has been analyze that Mutual Fund inflow is increasing by FII inflow due
to more number of investors understanding the need of investment which circulates more money
in the economy.

25
 Chart 10: Net Investment by Mutual Fund and Foreign Institutional Investors

150000

100000

50000

0
2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
-50000

-100000

FII Net. Flow MF Net. Flow

Over the period of 15 years Indian stock market has given a return of 21.62% on an average which
is known to be a good sign for the growth of our economy. In the year 2008, 2011 and 2015 the
stock market gave negative return to the investments due to Global Financial crisis (Subprime
crisis), Eurozone crisis and China Economic crisis respectively.

Table 4: Returns of indexes over 15 years

YEARS NIFTY SENSEX
2017 28.27 27.5
2016 3.12 2.01
2015 -3.95 -4.98
2014 30.98 29.58
2013 6.17 8.49
2012 27.26 25.05
2011 -25.14 -25.05
2010 17.95 17.37
2009 75.52 79.67
2008 -51.78 -52.54
2007 54.77 46.71
2006 39.82 46.32
2005 36.37 41.82
2004 10.64 12.43
2003 71.89 72.55

AVERAGE 21.4593 21.7953

26
Global Financial Crisis (Subprime Crisis) In 2008 the Indian stock market was corrected by 52%
and the Index came down from 21206 to 7697 in the span of 8 months due to devastate of
Global financial crisis. FIIs selling their shares worth Rs.52000 crores during this year made the
Indian stock market fall like pin of cards.
Eurozone Crisis Due to inelegance of Eurozone crisis the Indian stock market gave negative
return of 25.09% which was the worst ever in the Asian region. The Indian economy however
still grew at 7.1% as compared to 2% of global average. During the period FIIs were net sellers
which made the market go down.

China Economic Crisis In 2015 the Chinese GDP slowed down from 9% to 6.5% and their stock
market crashed by 32% in a month. Compare to that Indian markets crashed by 5.94% in one
single day and gave negative return of 4.46% in the year 2015. Due to the crises FIIs invested
Rs.17946.24 crore only as compared to previous 3 years.

During all of the 3 major crisis, the Indian markets have been dwindling due to FIIs selling
which shows complete control of FIIs on our markets. The FIIs are holding $328 billion of Indian
shares which is 51% of the free market capitalization. The Indian economy has grown during the
crisis due to inherent domestic consumption theme which makes our economy less reliant on
the global events.

27
 Table 5: Analysis of Net Investment by FII, MF, NIFTY and SENSEX

Years FII Net. MF Net. NIFTY SENSEX

Flow Flow

2017 53650.3 112049 10530.7 34056.8

2016 21398.3 47818 8185.8 26626.5
2015 17946.2 71564 7946.35 26117.5
2014 97736.1 23326 8282.7 27499.4
2013 113027 -21188 6304 21170.7
2012 128361 -20593 5905.1 19426.7
2011 -2714 6653 4624.3 15454.9
2010 133266 -27876 6134.5 20509.1
2009 83392.4 -5313 5201.05 17464.8
2008 -52986.9 13992 2959.15 9647.31
2007 70057.2 6195 6138.6 20287
2006 36393.1 15225 3966.4 13786.9
2005 46711.9 13267 2836.55 9397.93
2004 38704.2 -966 2080.5 6602.69
2003 30737.1 629 1879.75 5838.96

The table 5 shows the net investment by FIIs, MF, Nifty and Sensex from 2003 to 2015. During
the year 2003 net investment by FII was Rs.30737.1 crore, MF was Rs.629 crore, Nifty was
1879.75 points and Sensex was 5838.96 points. Net FIIs, Sensex and nifty grew positively over
the years and achieved Rs.71952.3 crores during 2007 then it experienced a sudden drift of
negative investment means withdrawal of Rs.52986.9crores.

In the same period Sensex and nifty was also at the low of 2959.15 points and 9647.31 points.
In the next consecutive year the market showed a positive movement as the net FIIs, Sensex
and nifty was on the raising front. Though MF at that time was not very popular in the market,
inflow of domestic fund was lacking and due to the crises in the year 2008 and 2011 mutual
funds have been affected by withdrawals of Rs.33189 in 2009-10 and Rs.41781 in 2012-13.

28
4.4.2 Hypothesis

1. Null Hypothesis (Ho): NSE NIFTY Index does not rise with the increase in the FII
Alternate Hypothesis (H): NSE NIFTY Index rise with the increase in the FII.

2. Null Hypothesis (Ho): NSE NIFTY Index does not rise with the increase in the MF.

Alternate Hypothesis (H): NSE NIFTY Index rise with the increase in the Mutual Fund.

3. Null Hypothesis (Ho): BSE SENSEX Index does not rise with the increase in the FII
Alternate Hypothesis (H): BSE SENSEX Index rise with the increase in the FII.

4. Null Hypothesis (Ho): BSE SENSEX Index does not rise with the increase in the MF
Alternate Hypothesis (H): BSE SENSEX Index rise with the increase in the MF

29
4.4.3 Empirical Analysis
Table 6: Regression model for NSE NIFTY

Indices Correlation R Square Significance

FII 0.320 0.102 0.001

MF 0.602 0.362 0.300

In above table exhibits the correlation and regression values of the independent variable NSE
NIFTY on the dependent variables of FII and MF. It helps to measure the degree of relationship
between the variables. Correlation of NSE NIFTY and FII is 0.320 and that of NSE NIFTY and MF is
0.602. In both the cases it shows positive correlation but in case of MF is likely to show high
correlation.

R Square is the coefficient of simple determination. It expresses the extent of variation in the
dependent variable as explained uniquely or jointly by the independent variables. The value of r
square ranges from 0 - 1. Small values indicate the model does not well. The value of R square in
the table 6 for NSE NIFTY and FII is 0.102, implying that 10.2% of the change in dependent variable
was explained by the independent variable. With regard to NSE NIFTY and MF R square was 0.362
and it reveals that 36.2% of change in dependent variable was explained by the independent
variable.

The p value of FII is less than 0.05, p < 0.05, therefore the null hypotheses (Ho).i.e., NSE NIFTY
Index does not rise with the increase in the FII is rejected at 0.05 level of significance and
alternate hypothesis (H).i.e., NSE NIFTY Index rise with the increase in the FII is selected as the
significant relationship is found between NIFTY and FII inflows. Whereas in case of MF, p > 0.05,
hence the null hypotheses (Ho).i.e., NSE NIFTY Index does not rise with the increase in the MF is
accepted.

30
 Table 7: Regression model for BSE SENSEX
Indices Correlation R Square Significance
FII 0.335 0.112 0.011

MF 0.582 0.339 0.792

In above table exhibits the correlation and regression values of the independent variable BSE
SENSEX on the dependent variables of FII and MF is considered to measure the degree of
relationship between the variables. Correlation of SENSEX and FII is 0.335 and that of SENSEX and
MF is 0.582. In both the cases it shows positive correlation that is good for the growth of market
and economy.

The value of R square in the table 6 for Sensex and FII is 0.112, implying that 11.2% of the change
in dependent variable was explained by the independent variable. With regard to SENSEX and
MF R square was 0.339 and it reveals that 33.9% of change in dependent variable was explained
by the independent variable.

The p value of FII is less than 0.05, p < 0.05, therefore the null hypotheses (Ho).i.e., BSE SENSEX
Index does not rise with the increase in the FII is rejected at 0.05 level of significance and in case
of MF the p value is greater than 0.05, hence the null hypotheses (Ho).i.e., BSE SENSEX Index
does not rise with the increase in the MF is accepted.

31
4.4.4 Brokers perception on MF and FII

To the better understanding of the flow of FII and MF for their impact on Indian stock market I
have made a survey of 103 brokers who understands the project and can relate well with the
markets. As broker be the runner of stock market it influences more to reach the depth of the
forecasting in the market.

Chart 11: Reasons of MF putting so much money in Indian Markets

25%

49%

26%

Bringing in more investors Help Stock Market Increase depth of market

Chart 12: Why MF outperforming FII in Indian Stock Market

17%

50%
33%

Longterm good for investors Stabilize the Indian markets Make Indian markets more vibrant

32
Factor Analysis:
Kaiser-Meyer-Olkin (KMO) test is a measure of how suitable my data is for factor analysis. The
primary data collected gives a KMO measure of sampling adequacy value of 0.814 and measure
of Bartlett’s test is significant at 0.000; both the values are statistically good indication of
beneficiary data.

Table 8: KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .814
Bartlett's Test of Sphericity Approx. Chi-Square 193.704
Df 28
Sig. .000

In table8 third question received the answers with highest communality larger amount of
variance in the variable by the factor solution.

Table 9: Communalities
Initial Extraction
MF can outweigh FII in Indian stock market in
1.000 .353
forth coming years?
Inflow of FII and MF can affect the GDP of
1.000 .508
economy?
Fall in inflow of FII and MF can bring a fall in
Indian Stock Market? 1.000 .781

Do you think that MF flows give more stability to

Indian markets? 1.000 .458

Do you think that MF will bring in better financial

inclusion and reduce dependency on foreign
1.000 .501
funds?

Do you think that MF will bring in more domestic

savings into the market? 1.000 .572

FII pulling out money will harm the economy 1.000 .673
FII pulling out money will harm the stock market. 1.000 .502

33
 Chapter 5
FINDINGS OF THE STUDY

1. Major part of the internship was spent in research, hence a better understanding about
the various sources of data generation has been developed over the time.

2. The work experience helps in improving the roles and responsibilities of the job that have
to be presented to them.

3. From the research and analysis FII inflows into India are found to be on a high degree of
volatility for the period of study.

4. Mutual Fund inflow is increasing by FII inflow from last 2 consecutive year due to more
number of investors understanding the need of investment which circulates more money
in the economy.

5. FII and movement of SENSEX and Nifty are closely correlated in India. The Movement of
FII has significant influence on the movement of stock market indices when there is an
upward trend in the FIIs due to greater buying, SENSEX and NIFTY also raises on the other
hand.

6. Impact of global turmoil was highly negative in the year 2008 and 2011, also the FII inflow
has been reduced in the year 2015.

7. Political factors also affect the flow of FII and MF for the rise and decline of Indian Stock
Market.

34
 Chapter 6
SUGGESTIONS & CONCLUSIONS
6.1 Suggestions

1. The FII inflows into India are very inconsistent and this will affect the Indian economy,
therefore factors influencing the FII inflows have to be kept in mind and measures should
be taken to curb the volatility in the FII inflows.

2. India among the world nation has a better outlook and industries are remarkably
performing well in all sectors. After analyzing the nature and performance of foreign
institutional investors and their influence in the Indian capital market SEBI can still be
more cautious in regulating the flow of Hot Money. The Indian Government and SEBI can
check the volatility of FIIs, and also more priority can be given to long term sources of
funds.

3. Mutual Fund flow may outperform FII in forth coming years if more number of investors
are attracting towards SIP and Lumpsum.

4. Our government should increase its foreign exchange reserves to build confidence and
attract more foreign institutional investors investing in India.

35
6.2 Conclusion
1. Worldwide Indian economy outlook is improving, with investment of global majors in
country, which is ranked the most attractive country for retail investment for emerging
markets. From my study on the impact of MF vs. FII on Indian stock market I came to know
that MF and FII have got substantial effect over the stock indices. They also have the
potential of influencing the process of economic development of India through the
positive impacts on macro-economic fundamentals of the country. Therefore, the policy
makers should provide the FIIs with more opportunities and reasons to invest in Indian
markets by suggesting and implementing prudential norms.

2. The policy makers should provide the FIIs with more opportunities and reasons to invest
in Indian markets by suggesting and implementing prudential norms, whereas MF are
more likely to stabilize the economy in last 2 years. It can result to be a cherry on cake if
the MF flow increase by this speed.

3. Working in organization has developed key skills in communication, team building and
simultaneous working on the project gave an understanding of managing balance
between different tasks assigned.

4. Practicing on trading activity like cash on delivery bases have focused of fundamentals of
the company and volatility of the share during changes in the market.

36
 Chapter 7
Annexure
Annexure 1: Questionnaire of Public Survey
1. Name _____________________________

2. Age
 18-25
 26-35
 36-45
 Above 46

3. Gender
 Male
 Female
 Others

4. Marital status
 Married
 Unmarried

5. Educational Background
 Under graduate
 Graduate
 Post graduate

6. Monthly Income
 Below 10000
 10000-30000
 31000-60000
 61000-90000
 Above 90000

7. Are you aware about Mutual fund?

 Yes
 No

8. Are you aware about Foreign Institutional Investors (FII)?

 Yes
 No

37
9. What is the source of information?
 Word of mouth
 News paper
 Television
 Internet

10. Do you invest in mutual funds?

 Yes
 No

11. What way do you prefer to invest in Mutual fund?

 Lump sum
 Sip

12. Why do you invest in Mutual fund?

 Best Returns
 Tax benefit
 Liquidity
 Systematic approach to Investment

13. Related to what your broker gives you much information about investing in Indian Market?
 FII flows
 Mutual Fund flows
 Political event that affect flows
 Trading strategies on Budget day when FII are more volatile.

38
Annexure 2: Questionnaire of Brokers Survey

1. Name: ____________________________________________________________

2. MF can outweigh FII in Indian stock market in forth coming years?

 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree

3. Inflow of FII and MF can affect the GDP of economy?

 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree

4. Fall in inflow of FII and MF can bring a fall in Indian Stock Market?
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly Disagree

5. Do you think that MF flows give more stability to Indian markets?

 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree

6. Do you think that MF will bring in better financial inclusion and reduce dependency on
foreign funds?
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree

39
7. Do you think that MF will bring in more domestic savings into the market?
 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree

8. FII pulling out money will harm the economy

 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree

9. FII pulling out money will harm the stock market.

 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree

10. MF and FII are opposite to each other many times - this is good for our markets.
 Yes
 No

11. In 2015 to 2017 MF flows are more than FII flows - do you think it is good for Indian
markets.
 Yes
 No

12. MF putting so much money in Indian markets due to which reason?

 Help Stock market
 Increase depth of market
 Bring in more investor

13. MF outperforming FII flows in Indian Stock market due to which reason?
 Make Indian markets more vibrant
 Stabilize the Indian markets
 Long-term good for Investors

40
Annexure 3: References & Websites
References

Mohanamani. P and Dr. T. Sivagnanasithi, Impact of Foreign Institutional Investors on the Indian
Capital Market; Journal of Contemporary Research in Management Vol. 7; No. 2 April - June,
2012.

Paramita Mukherjee and Malbika Roy, What Drives the Stock Market Return in India? An
Exploration with Dynamic Factor Model; Research article on February 16, 2016.

Srinivasan P, Kalaivani M (January 2013), Determinants of Foreign Institutional Investment in

India: An Empirical Analysis, MPRA Paper No. 43778, posted 16. January 2013 13:06 UTC.
Suchismita Bose, Dipankor Coondoo, The Impact of FII Regulations in India: A Time-Series
Intervention Analysis of Equity Flows, Money & Finance, ICRA Bulletin, Vol. 2, No. 18, pp 54-83,
July-December 2004.

Sentimental Mutual Fund Flows, George J. Jiang Washington State University and H. Zafer
Yuksel University of Massachusetts Boston June 2014.

41
Websites
https://www.moneycontrol.com/news/business/mutual-funds/-1326381.html

https://www.republication.com/gifm-spl/gifmv6n811.pdf

https://www.amfiindia.com/indian-mutual

http://www.brokersforumofindia.com/

http://www.moneycontrol.com/stocks/marketstats/activity.php?flag=FII

https://www.nseindia.com/emerge/

http://journals.sagepub.com/doi/full/10.1177/0972652715623681

SSRN: http://ssrn.com/abstract=755324
https://www.bseindia.com/indices/IndexArchiveData.aspx
https://www.moneycontrol.com/stocks/hist_index_result.php?indian_indices=9
https://www.way2wealth.com/market/mfactivity

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Annexure 4: List of Abbreviation

BSE Bombay Stock Exchange

NSE National Stock Exchange
BBF BSE Brokers’ Forum
ANMI Association of National Stock Exchange Members of
India
MF Mutual Fund
FII Foreign Institutional Investors
NIFTY National Fifty
SENSEX Sensitive Index
GDP Gross Domestic Product
IPO Initial Public Offering
FPO Follow up on Public Offering
MCX Multi Commodity Exchange
NCDEX National Commodities and Derivatives Exchange
UTI Unit Trust of India
RBI Reserve Bank of India
SEBI Securities Exchange Board of India
AUM Asset Under Management
AMFI Association of Mutual Funds of India
CDSL Central Depository Services Limited
NSDL National Securities Depository Limited
KOFIA Korea Financial Investment Association
ETF Exchange Traded Fund
MSME Micro Small and Medium Enterprises

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