1

A PROJECT REPORT ON
CAPITAL MARKET AND IMPACT OF FOREIGN
INVESTMENT
SUBMITTED BY
PIYUSH VINAYAK VATSYAYAN (MARKETING)
BATCH (2018-20)
UNDER THE GUIDANCE OF
Prof. HARSHAD BHADANGE
SUBMITTED TO
UNIVERSITY OF PUNE
IN THE PARTIAL FULFILMENT OF THE DEGREE
OF
MASTER OF BUSINESS ADMINISTRATION
THROUGH

SURYADATTA INSTITUTE OF
MANAGEMENT AND MASS
COMMUNICATION, PUNE -
411021
 2

ACKNOWLEDGEMENT

At the start, I would like to express my sincere gratitude to Prof.

Harshad bhadange of the internal guide, my project guide from
Suryadatta Institute of business management and technology
(S.I.B.M.T), Pune - 411021 for successful completion of a
project in partial fulfillment of Master of Business
Administration (M.B.A.) under his able guidance to allow me to
work on such an interesting subject. He provided me proper and
correct direction for completion of project work. His continuous
guidance during the course of project helped me in channelizing
my efforts, quite appropriately.

I am also thankful to Manager Shivshankar Biradar Karvy Stock

Broking LTD for guidance given and cooperation extended for
carrying out the project.

I am also thankful to all the respondents and friends who have

helped me to conclude the contents of the project in decent and
presentable manner.

Date: Piyush Vatsyayan (Marketing)

Place: MBA Semester III
 3

Declaration

I, the undersigned PIYUSH VATSYAYAN, declare that the

Project Report titled as, “CAPITAL MARKET AND
IMPACT OF FOREIGN INVESTMENT", submitted by me
for partial fulfillment of Master of Business Administration
(M.B.A.) is the original record of the project work carried out
by me during the period from 1 June, 2019 to 1st August, 2019
under the able guidance of name of the internal guide and the
same has not formed the basis for the award of any degree,
diploma, association, fellowship, titles - in or for any other
Statutory University or Autonomous Institutions functioning in
India or me during the period from 1 June, 2019 to 31 July,
2019 under the able guidance of name of the internal guide and
the same has not formed the basis for the award of any degree,
diploma, association, fellowship, titles - in or for any other
Statutory University or Autonomous Institutions functioning in
India or abroad imparting higher education in Management.
 4

INDEX:

CHAPTER CONTENTS PAGE

NO.
1 INTRODUCTION 5

2 LITERATURE REVIEW 8

3 INDUSTRY AND COMPANY PROFILE 11

4 RESEARCH METHODOLOGY 18

5 DATA ANALYSIS AND FINDINGS 21

6 CONCLUSION

7 RECOMMENDATION AND SUGGESTION

8 LIMITATIONS OF THE STUDY & SCOPE

FOR FURTHER REPORTS
9 ANNEXURES
 5

CHAPTER 1- INTRODUCTION

TOPIC: Capital Market and impact of foreign

investment
Introduction to capital market:
Capital markets are venues where savings and investments are channeled
between the suppliers who have capital and those who are in need of
capital. The entities who have capital include retail and institutional
investors while those who seek capital are businesses, governments, and
people.

Capital markets are composed of primary and secondary markets. The

most common capital markets are the stock market and the bond market.
Capital markets seek to improve transactional efficiencies. These markets
bring those who hold capital and those seeking capital together and
provide a place where entities can exchange securities.

Key Takeaways:
 Capital markets refer to the places where savings and investments
are moved between suppliers of capital and those who are in need
of capital.
 Capital markets consist of the primary market, where new
securities are issued and sold, and the secondary market, where
already-issued securities are traded between investors.
 The most common capital markets are the stock market and the
bond market.
 6

Understanding Capital Market:

The term capital market broadly defines the place where various entities
trade different financial instruments. These venues may include the stock
market, the bond market, and the currency and foreign exchange markets.
Most markets are concentrated in major financial centers including New
York, London, Singapore, and Hong Kong.

Capital markets are composed of the suppliers and users of funds.

Suppliers include households and the institutions serving them pension
funds, life insurance companies, charitable foundations, and non-financial
companies—that generate cash beyond their needs for investment. Users
of funds include home and motor vehicle purchasers, non-financial
companies, and governments financing infrastructure investment and
operating expenses.

Capital markets are used to sell financial products such as equities and
debt securities. Equities are stocks, which are ownership shares in a
company. Debt securities, such as bonds, are interest-bearing IOUs.
These markets are divided into two different categories: primary
markets—where new equity stock and bond issues are sold to investors—
and secondary markets, which trade existing securities. Capital markets
are a crucial part of a functioning modern economy because they move
money from the people who have it to those who need it for productive
use.

Primary versus Secondary Capital Markets:

Capital markets are composed of primary and secondary markets. The

majority of modern primary and secondary markets are computer-based
electronic platforms. Primary markets are open to specific investors who
 7

buy securities directly from the issuing company. These securities are
considered primary offerings or initial public offerings (IPOs).

The secondary market, on the other hand, includes venues overseen by a

regulatory body like the Securities and Exchange Commission (SEC)
where existing or already-issued securities are traded between investors.
Issuing companies do not have a part in the secondary market. The New
York Stock Exchange (NYSE) and NASDAQ are examples of the
secondary market.

Impact of foreign investment:

Foreign direct investment (FDI) is an investment made by a firm or
individual in one country into business interests located in another
country. Generally, FDI takes place when an investor establishes foreign
business operations or acquires foreign business assets, including
establishing ownership or controlling interest in a foreign company.
Foreign direct investments are distinguished from portfolio investments
in which an investor merely purchases equities of foreign-based
companies.

Foreign direct investments are commonly made in open

economies that offer a skilled workforce and above-average growth
prospects for the investor, as opposed to tightly regulated economies.
Foreign direct investment frequently involves more than just a capital
investment. It may include provisions of management or technology as
well. Foreign investment is when a company or individual from one
nation invests in assets or ownership stakes of a company based in
another nation. As increased globalization in business has occurred, it's
become very common for big companies to branch out and invest money
in companies located in other countries. These companies may be
opening up new manufacturing plants and attracted to cheaper labor,
production, and fewer taxes in another country. They may make a foreign
investment in another firm outside of their country because the firm being
purchased has specific technology, products, or access to additional
customers that the purchasing firm wants. Overall, foreign investment in
a country is a good sign that often leads to growth of jobs and income. As
more foreign investment comes into a country, it can lead to even greater
investments because others see the country as economically stable.
Foreign investments can be split into direct and indirect
investments. Direct investments are when companies make physical
 8

investments and purchases in buildings, factories, machines, and other

equipment outside of their home country. Indirect investments are when
companies or financial institutions purchase positions or stakes in
companies on a foreign stock exchange.
 9

CHAPTER 2: Literature Review

Ms. Anju Bala - Stock Market is one of the most vibrant sectors in the
financial system, marking an important contribution to economic
development. Stock Market is a place where buyers and sellers of
securities can enter into transactions to purchase and sell shares, bonds,
debentures etc. In other words Stock Market is a plate form for trading
various securities and derivatives. Further, it performs an important role
of enabling corporate, entrepreneurs to raise resources for their
companies and business ventures through public issues. Today long term
investors are interested to invest in the Stock market rather than invest
anywhere. The Bombay Stock Exchange (BSE), the National Stock
Exchange (NSE) and the Calcutta Stock Exchange (CSE) are the three
large stock exchanges of Indian Stock Market. The main objective of
present study is to present review of literature related to Indian Stock
Market to study the Indian Stock Market in depth. The study would
facilitate the reader to know the past, current and future trend or prospects
of Indian Stock market. This study would provide guidelines to investor
to maximize profit with minimize risks. High degree of volatility in the
recent times in the Indian market has led to more development in the
future.

Gupta (1972) in his book has studied the working of stock exchanges in
India and has given a number of suggestions to improve its working. The
study highlights the' need to regulate the volume of speculation so as to
serve the needs of liquidity and price continuity. It suggests the
enlistment of corporate securities in more than one stock exchange at the
same time to improve liquidity. The study also wishes the cost of issues
to be low, in order to protect small investors.

Panda (1980) has studied the role of stock exchanges in India before and
after independence. The study reveals that listed stocks covered four-
fifths of the joint stock sector companies. Investment in securities was no
longer the monopoly of any particular class or of a small group of people.
It attracted the attention of a large number of small and middle class
individuals. It was observed that a large proportion of savings went in the
first instance into purchase of securities already issued.
 10

Gupta (1981) in an extensive study titled `Return on New Equity Issues'

states that the investment performance of new issues of equity shares,
especially those of new companies, deserves separate analysis. The factor
significantly influencing the rate of return on new issues to the original
buyers is the `fixed price' at which they are issued. The return on equities
includes dividends and capital appreciation. This study presents sound
estimates of rates of return on equities, and examines the variability of
such returns over time.

Jawaharlal Lal (1992) presents a profile of Indian investors and evaluates

their investment decisions. He made an effort to study their familiarity
with, and comprehension of financial information, and the extent to
which this is put to use. The information that the companies provide
generally fails to meet the needs of a variety of individual investors and
there is a general impression that the company's Annual Report and other
statements are not well received by them.

L.C.Gupta (1992) revealed the findings of his study that there is existence
of wild speculation in the Indian stock market. The over speculative
character of the Indian stock market is reflected in extremely high
concentration of the market activity in a handful of shares to the neglect
of the remaining shares and absolutely high trading velocities of the
speculative counters. He opined that, short- term speculation, if
excessive, could lead to "artificial price". An artificial price is one which
is not justified by prospective earnings, dividends, financial strength and
assets or which is brought about by speculators through rumours,
manipulations, etc. He concluded that such artificial prices are bound to
crash sometime or other as history has repeated and proved.

Nabhi Kumar Jain (1992) specified certain tips for buying shares for
holding and also for selling shares. He advised the investors to buy shares
of a growing company of a growing industry. Buy shares by diversifying
in a number of growth companies operating in a different but equally fast
growing sector of the economy. He suggested selling the shares the
moment company has or almost reached the peak of its growth. Also, sell
the shares the moment you realise you have made a mistake in the initial
selection of the shares. The only option to decide when to buy and sell
 11

high priced shares is to identify the individual merit or demerit of each of

the shares in the portfolio and arrive at a decision.

Pyare Lal Singh (1993) in the study titled, Indian Capital Market - A
Functional Analysis, depicts the primary market as a perennial source of
supply of funds. It mobilises the savings from the different sectors of the
economy like households, public and private corporate sectors. The
number of investors increased from 20 lakhs in 1980 to 150 lakhs in 1990
(7. 5 times). In financing of the project costs of the companies with
different sources of financing, the contribution of the securities has risen
from 35.01% in 1981 to 52.94% in 1989. In the total volume of the
securities issued, the contribution of debentures / bonds in recent years
has increased significantly from 16. 21% to 30.14%.

Sunil Damodar (1993) evaluated the 'Derivatives' especially the 'futures'

as a tool for short-term risk control. He opined that derivatives have
become an indispensable tool for finance managers whose prime
objective is to manage or reduce the risk inherent in their portfolios. He
disclosed that the over-riding feature of 'financial futures' in risk
management is that these instruments tend to be most valuable when risk
control is needed for a short- term, i.e., for a year or less. They tend to be
cheapest and easily available for protecting against or benefiting from
short term price. Their low execution costs also make them very suitable
for frequent and short term trading to manage risk, more effectively.

R.Venkataramani (l994) disclosed the uses and dangers of derivatives.

The derivative products can lead us to a dangerous position if its full
implications are not clearly understood. Being off balance sheet in nature,
more and more derivative products are traded than the cash market
products and they suffer heavily due to their sensitive nature. He brought
to the notice of the investors the 'Over the counter product' (OTC) which
are traded across the counters of a bank. OTC products (e.g. Options and
futures) are tailor made for the particular need of a customer and serve as
a perfect hedge. He emphasised the use of futures as an instrument of
hedge, for it is of low cost.
 12

Chapter 3: Industry Profile &

Company Profile:

Industry Profile:
SECURITIES MARKET IN INDIA:

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. “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.

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
 13

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.

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.

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
 14

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.

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.

Services Offered by KARVY:

KARVY EQUITY BROKING:

Karvy Stock Broking Ltd offer online trading on key exchanges —NSE
(National Stock Exchange) and BSE (Bombay Stock Exchange). Key
important points trading with Karvy are they make trading safe to the
maximum possible extent by accounting for several risk factors and
planning accordingly. They have created a very robust trading platform
that facilitates customers to trade online not only in equities, but also buy
fixed deposits, mutual funds, commodities, currencies and also participate
 15

in a public issue. Karvy's online platform enables customers to view their

portfolio online and also access various research reports and views on
stocks. It also provides them with a facility to communicate with Karvy’s
research/advisory teams online. So in summary strong trading platform
and strong research reports are key benefit of Karvy's Stock Broking Ltd.

KARVY DEPOSITORY PARTICIPANT

Karvy is providing Demat facility, KSBL [Karvy Stocking Broking Ltd]

is member of NSDL and CSDL for Demat service. Karvy started
membership with NSDL and CSDL in 1998 and emerged as one of the
top-3 depository participants in India, in terms of customers serviced.

KARVY WEALTH MANAGEMENT:

Karvy is offering comprehensive wealth management solutions for its

customers through Karvy Private Wealth (KPW) or karvywealth.com.
Karvy wealth managers provide direction to a client’s financial decisions,
enabling him achieve his financial and life goals. As a wealth manager,
we collate the relevant financial information and life goals of the client,
assess his risk tolerance level, examine his current financial status, and
identify a strategy to fulfill his goals.

KARVY COMMODITIES BROKING:

Karvy Comtrade Limited (KCTL) or karvycommodities.com is India’s

leading commodities trading house. Karvy started providing commodity
trading in the early phase when Indian market was adopting commodities
trading, so strong business presence as well as award winning research
service. KCTL have presence in wholesale markets where the
commodities are auctioned purely to get a complete sense on the demand
supply for most of the agricultural products. Karvy Comtrade Limited is
having membership with below given commodity exchanges:

 Multi Commodity Exchange of India (MCX)

 National Commodity and Derivatives Exchange (NCDEX)

 16

 National Multi-Commodity Exchange of India (NMCE)

 National Spot Exchange (NSEL)

 NCDEX Spot Exchange (NSPOT)

 Ace Commodity Exchange (ACE)

 Indian Commodity Exchange (ICEX)

KARVY CURRENCY DERIVATIVES TRADING:

Currency derivative are part of Karvy Stock Broking Limited, where

Karvy specialized research team provide customized hedging strategies
for importers, exporters and companies with foreign exchange exposure.
Karvy Currency Derivatives Segment is active member of:

 National Stock Exchange (NSE)

 Metropolitan Stock Exchange of India (MSEI)

 Bombay Stock Exchange (BSE)

Karvy Non-banking Financial Services:

Karvy Finance is incorporated in 2009, Karvy Finance is part of Karvy

groups, providing Non-banking Financial Services (NBFC) like personal
loans, business loans, loans against security and so on. Primary focus of
Karvy Finance is on micro & small enterprise secured business loans with
loan against property, loan against gold and loan for small commercial
vehicles.

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. Their journey to
emerge as a personal finance advisor, they will be better positioned to
 17

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.

Karvy Distribution of Financial Products:- Mutual Funds Investment:

Karvy Stock Broking Ltd, provide investment options in Mutual Funds,

National Pension System (NPS), Corporate Fixed Deposits, Capital Gain
Bonds and many more. Advance research and customized solution for
investment is also provided by Karvy.

Karvy Registry services for Corporate and Mutual funds:

Karvy Computershare is joint venture between Karvy and Australia-based

Computershare. The Company core business include Issue registrar,
Corporate Shareholder Services and Mutual Fund Services.

Karvy Research:

Report Karvy as stock broker is having strong hold in market. Daily

market summary in morning and evening, weekly, monthly and long term
investment research reports are available for register users. Research
reports are also available for commodity trading, Mutual Funds.

Karvy Margin Funding:

Karvy as stock broker provide margin funding to his investors. Margin

against shares option is lso available to get margin on your long term
holdings.

Karvy NRI Trading Services:

Invest in Equities, Initial Public Offerings, ETFs, Mutual Funds and

Futures & Options with Karvy NRI trading account. Karvy providing end
to end solution for NRI by opening NRI Trading account, NRI Demat
account, NRI Bank account, Assisted Trading, PAN Card Service and
many more.
 18

Karvy Priority Account:

Karvy Priority Account is specially planned account for High Net worth
Individuals (HNIs) and Corporate. This service include stock
recommendations to exclusive trade reports, from various trading options
available to personalized portfolio management, Knowledgeable Support
by research experts, personalized guidance by dedicated relationship
managers and equity advisors, live chat, investor awareness programs,
skype sessions and many more. Minimum requirement for Karvy Priority
account is maintain initial margin amount of Rs. 5 Lac and above.

Karvy IPO Investment:

Investment in IPO is applicable via ASBA process via giving karvy

demat account details.
Competitors of Karvy:
India Bull
Motilaloswal Securities
Bonaza Securities
Kotak Securities
Eastern Financiers
India Infoline
Reliance Money
Indira Securities and etc.
 19

Financial Services

 Equity Broking
 Depository Participant
 Wealth Management
 Commodities Broking
 Currency Derivatives
 Non-banking Financial Services
 Distribution of Financial Products
 Realty
 Registry services for Corporate
and Mutual funds
 Investment Banking
 Insurance Repository
 The Finapolis
 Forex & Currencies

Non-Financial Services

 Data Management Services

 International BPO
 Alternate Energy
 Data Analytics
 20

CHAPTER 4: RESEARCH METHODOLOGY

Data Collection:

For data collection I prepared a well defined questionnaire as a research

instrument consisting questions aimed to measure the consumer
perception about insurance company in India, their views and comments
about company’s structure. I conducted unstructured interviews of 100
persons of different age groups in time duration of three days. All the data
generated was primary data that was generated people of age group under
Pune region.

Primary Data

Individual respondents, Chartered Accountant, Hotels Managers, Real

estate persons, CEO of different companies, Sales Managers. These were
the main source of Primary data. The method of collection of primary
data was direct personal interview through a structured questionnaire and
via LinkedIn or cold calling.

Secondary Data:

It was collected from internal sources. The secondary data was collected
on the basis of organisational file, official records, newspapers,
magazines, management books, personal reference, preserved
information in the company’s database and website of the company.

Research Objectives:
Objectives of Capital Markets:

1. To study the socio economic profile of retail investors.

2. To analyse the factors influencing the investment behaviour of retail

investors

3. To examine the trading practices of retail investors in equity market

4. To identify the factors influencing the risk taking ability of retail

investors
 21

5. To present the problems of retail investors in the capital market.

6. To elicit the opinion of the retail investors on the policy issues of

capital market.

7. To suggest certain measures to the policy makers for the protection of

retail investors.

Objectives of Foreign Investment:

The main objective of the study id to analyze the impact of foreign direct
investment on economic growth of India. To achieve this objective the
study first reviews the theoretical and empirical literature on the impact
of FDI on economic growth in India. According to the previous literature
the FDI inflows have a positive impact on economic growth of host
countries. This paper focuses on the FDI led growth hypothesis in the
case of India.

1. To consider the short run and long run relationship between FDI and
economic growth

2. To consider the perception of the civil society and foreign from coward
FDI.

Research Design:

Research was initiated by examining the secondary data to gain insight

into the problem. The primary data is evaluated on the basis if analysis of
the secondary data.

Developing the research plan:

The data for this research project has been collected through self
administration. Due to time limitation and other constraints direct
personal interview method is used. A structured questionnaire was framed
as it is less time consuming, generates specific and to the point
information, easier to tabulate and interpret. Moreover respondents prefer
to give direct answers. In questionnaires open ended and closed ended,
both the types of questions has been used.
 22

Sampling Plan:

Since it is not possible to study whole population, it is necessary to obtain

representatives samples from the population to understand its
characteristics.

Sampling units:

Individual respondents for studying customer buying behavior and market

segmentation, selected randomly from different areas in Pune, like
various shopping malls and markets, Government offices, Chartered
accountants, Tax consultants, Lawyers, business men, professionals and
House Wives.

Sampling Technique:

Random Sampling

Research Instrument:

Structured Questionnaire

Contact Method:

Personal Interview

Sample Size:

Study of Capital Market and Impact of Foreign Investment

Data Collection Instrument Development

The mode of collection of data is based on survey method and field

activity. Primary data collection is based on personal interview. I have
prepared the questionnaire according to the necessity of the data to be
collected.

Research Limitations:

The research is confined to certain parts of Pune and does not necessarily
show a pattern applicable to all of country.Some respondents were
reluctant to divulge personal information which can affective validity of
all responses in a rapidly changing industry, analysis on one day or in one
 23

segment can change very quickly. The environmental changes are vital to
be considered in order to assimate the findings.
 24

CHAPTER 5: DATA ANALYSIS AND FINDINGS

I have presented below the project findings and analysis, addressed to
the respondents to guage the attitude, perception and consumer
behavior of the people toward life insurance.

SWOT ANALYSIS OF CAPITAL MARKET:

STRENGTH:

1. It is India’s oldest and largest circulated magazine about stock market

investments.
2. The magazine has been in circulation for a formidable 27 years.
3. Sections in the magazine like Capitaline Corner and Stock Watch are
very popular among the readers.
4. The magazine is considered authority on stock market investment
issues.
5. Popular brand and a good reputation amongst its customer base.

WEEKNESS:
1. The appeal of the magazine is limited to people interested in studying
and investing in the capital market.
2. The magazine is sometimes criticized for being too detailed and
tedious for a lay man but then the magazine is highly targeted.

OPPORTUNITY:
1. The magazine can make tie-ups with corporates and students to
increase its subscription.
2. The magazine can make use of the social media and virtual space for
its branding to increase its popularity among the youth.
3. The magazine can leverage upon the fact that it does not have any
strong competitors.

THREATS:
1. Nowadays several TV shows offer the same kind of information, thus
affecting brand loyalty.
2. Various websites are coming up for investors which are a cheaper
source of information.
 25

3. The circulation of the magazine is linked to the performance of the

stock market.

DATA ANALYSIS:
26
27
28
29
30
31
32
33
 34

Learnings from Karvy:

1. IN REFERENCE OF EQUITY: -
Equity consist of a fund that a shareholder invest in a company plus a
certain amount of profit earned by them is retained by the company for
the further growth and expansion of equity. While being a risky
investment, offers higher return than the saving account or a fixed
deposits because the profit that may be earned is virtually unlimited.
A. For investing in equity market one need is demat account. A demat
account is a type account that allows investors to hold their shares in
electronic form. The process of converting physical shares into electronic
from is called dematerialization.
A demat account can be opened in both online and offline form. Online in
case if the mobile number of the client is linked with his aadhar card else
offline procedure is followed.
Documents required to open a DEMAT account:-
 Self-Attested pan card
 Self-attested aadhar card
 Cancelled cheque (personalized) margin amount cheque
 35

 One passport size photograph In case of unavailability of personalized

cheque then a photocopy of passbook or bank statement can also be
considered.
DEMAT account is always listed under NSDL & CDSL. When a person
open a DEMAT account in karvy, his account number starts with account
number of Karvy itself.
B. IPO’S-Initial Public Offerings: - An initial public offering is when a
private company or corporation raises investment capital by offering its
stock to the public for the first time. Growing companies seeking capital
to expand are those that generally use initial public offerings, but large,
privately owned companies or corporations looking to become publicly
traded can also do them. In an initial public offering, the issuer, or
company raising capital, brings in an underwriting firm or investment
bank, to help determine the best type of security to issue, offering price,
amount of shares and timeframe for the market offering.
Every IPO have fixed lot size and the listing process takes time of 7 days,
and it is always suggested that one should always choose cut-off price for
buying an IPO’s. Every lot costs to minimum amount of RS. 15000.

2.IN REFERENCE OF MUTUAL FUNDS: - A mutual fund collects

money from investors and invests the money on their behalf. It charges a
small fee for managing the money. Mutual funds are an ideal investment
vehicle for regular investors who do not know much about investing.
Investors can choose a mutual fund scheme based on their financial goal
and start investing to achieve the goal. Mutual funds can be done in two
forms:-Lump sum and SIP
SIP: - Systematic Investment Plan, commonly referred to as an SIP,
allows you to invest regularly a fixed sum in your favorite mutual fund
scheme/s. In SIP, a fixed amount is deducted from your savings account
every month and directed towards the mutual fund you choose to invest
in. An individual can invest in
SIP with a minimum amount of Rs. 1000. Documents required for
investing in SIP are:
 Self-attested PAN card
 Self-attested Aadhar Card
 One amount cheque.
 36

CHAPTER 6: CONCLUSION
On THE Basis of study it is found that Karvy stock broking ltd. is better
service provider than other stock brokers because of their research and
personalized advice on which stock to be bought and sell.
Karvy provides facility of trade as well as relationship manager facility
for encouragement and protect the interest of investors. It also provide the
information through the mobile app alert, regarding what IPO’s are
coming in the market and it also provide it’s research on the future
prospect of IPO.
Study also include that people are not much aware of commodity market
while it’s going to be big market in India. The company should organize
the seminars and similar activities to enhance the knowledge of
prospective and existing customers, so that they can feel more
comfortable while investing in stock market.
Karvy has enough number of branches all over India and therefore it is a
great advantage for the company and the company also planning to
expand its network. Karvy also provides the facility of trading in almost
all the exchanges and therefore whatever the customer demands the
company has in its package. The company also has a very good research
team at its Head Office and this is meant for the better working as well as
for the customer of Karvy only. The company also has the advantage of
the existing customers where their level of faith and their view about the
company to the outside world will be a helping hand for the company to
expand its business.
 37

CHAPTER 7: RECOMMENDATION AND

SUGGESTION
RECOMMENDATIONS:
Mutual Funds can also be offered as they have high risk profile.
Company should take initiative to get demat account of these customers. •
The age group of 41-50 years, investors are from the 15,000- 20,000 Rs
disposable income group. Investor in this group are invested in Insurance
sector, the primary focus of these investors are retirement and time
horizon is likely to be 6-9 years. This is also good potential group for the
retirement plan in ULIPs. Fixed deposits can be a good option for them. •
In the survey there were lot of people who were in the age group of above
60. For this group of people the company can target Fixed deposits which
gives continues return like monthly interests so that they can keep on
getting returns.

SUGGESTIONS:
Return on Investment is must but the risk also should be minimizing at
the same time. • No one loves to lose his hard earned money therefore it
should be invested in safer place. • Services are must for them and
therefore the company must also concentrate on this aspect. • Good
advisory services, secrecy of the data given to the company as well as
every people must treated as they all are equal i.e. no biasness. • Charges
of the services provided to them should be reasonable and viable.
 38

CHAPTER 8: LIMITATIONS OF THE

STUDY & SCOPE FOR FURTHER
RESEARCH:
• Total number of financial instrument in the market is so large that it
needs a lot of resources to analyze them all. There are various companies
providing these financial instruments to the public. Handling and
analyzing such a varied and diversified data needs a lot of time and
resources.

• As the project is based on secondary data, possibility of unauthorized

information cannot be avoided.

• Reluctance of the people to provide complete information about them

can affect the validity of responses.

• Due to time and cost constraint study will be conducted in only selected
area of Lucknow.

• The lack of knowledge in customers about the financial instruments can

be a major limitation.

• The information can be biased due to use of questionnaires.

 39

ANNEXURES:

BIBLOGRAPHY:
40
 41

QUESTIONNAIRE
Name: - ___________________________ Age: - _________________
Contact No: _______________________ Email Id: - ________________
1. What is your occupation?
a) Service
b) Business
c) Student
d) Other
 42

2. What is your Annual Income Bracket?

a) Below 1,20,000
b) 1,20,000-3,00,000
c) 3,00,000 -5,00,000
d) Above 5,00,000

3. Your Educational Qualification? ________________________

4. What is your marital Status?

a) Single
b) Married
c) Divorced

5. How many dependents you have? Mention numbers ____________

6. Under which category your present house comes?

a) Ancestral
b) Owned
c) Rent
d) Employer’s

7. Do you have any vehicle, tick appropriate?

a) Car
b) Two Wheeler
c) Others
d) None

8. Are you investing into Equity Market?

a) Yes
b) No

9. If Yes, What type of investor are you?

a) Short Term
b) Mid Term
c) Long Term
d) Mix of any Two

10. What percentage of your expenditure from monthly Income?

a) 25% - 40%
 43

b) 40% - 60%
c) 60%-80%

11.What attracts you to Equity

Market?a) High Return b) Speculation c) Dividend d) Liquidity of invested
Fund

12.What sources of funds do you utilize to invest or trade in the Stock

market?
a) Saving/ Personal
b) Loans
c) Pledging

13. What investment option are you considering?

a) Stock
b) Mutual Fund
c) Small Savings
d) Gold/ Silver (Commodity)
e) Real Estate

14. Are you insured?

a) Yes
b) No

15. If yes, what is the coverage amount of your policy?

________________

16. Your investment in Mutual Fund?

a) Yes
b) No
17. If yes, please mention plan ________________
 44

CONCLUSION
On THE Basis of study it is found that Karvy stock broking ltd. Is better
service provider than other stock brokers because of their research and
personalized advice on which stock to be bought and sell.
Karvy provides facility of trade as well as relationship manager facility for
encouragement and protect the interest of investors. It also provide the
information through the mobile app alert, regarding what IPO’s are
coming in the market and it also provide it’s research on the future
prospect of IPO.
Study also include that people are not much aware of commodity
market while it’s going to be big market in India. The company should
organize the seminars and similar activities to enhance the knowledge of
prospective and existing customers, so that they can feel more
comfortable while investing in stock market.
45
46