A SYNOPSIS REPORT

On
“ANALYTICAL STUDY OF CAPITAL FORMATION WITH
REFERENCE TO ALOK INDUSTRIES LIMITED”
Submitted Io
RASHTRASANT TUKDOJI MAHARAJ NAGPUR UNIVERSITY,
NAGPUR.
In Partial Fulfillments of the Master’s Degree In
MASTER OF BUSINESS ADMINISTATION (MBA)
SPECIALIZATION
Finance Management
Submitted By
KOMAL D. PATIL
M.COM. IV Sem.
Guidance Of
Dr.SHIVANI KATAKVAR

Backward Class Youth Relief Committee’s”

KDK COLLEGE OF ENGINEERING, UMRED,
NAGPUR-441204
For The Academic Year
2019-20
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Sr. No Title Page No.

1 Introduction

2 Introduction to Capital formation

3 Objective of study

4 Company Profile

5 Theoretical background

6 Data analysis & Interpretation

7 Conclusion

8 Recommendation

9 Bibliography

Annexure

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 Introduction

Capital is one of the important factors which governs the quantity and
the composition of output in a country. If there are increasing resources of capital in a
country, it results in technological discoveries, raises productivity of labour, increases
the rate of economic development and provides higher standard of living for the
masses. In case, there is deficiency of capital assets such as machinery equipment
tools, dams, roads, railways, bridges, etc ,the country then remains trapped in the
vicious circle of poverty. Capital accumulation, thus, in brief is at the vary core of
economic development.

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 Introduction of Capital Formation

Capital formation is the process of building up the capital stock of a country

through investing in productive plants and equipments. Capital formation, in other
words, involves the increasing of capital assets by efficient utilization of the available
and human resources of the country

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 Objective of study

1) To study the various sources of capital formation.

2) To study the sources of capital of Alok textile industry.

3) To study the different sources of capital in long, medium and short

term.

4) To study the different risks, advantage associated with sources of

capital.

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 Company profile

- Alok was established in 1986 as a private limited company, with our first polyester
texturising plant being set up in 1989. We became a public limited company in 1993.
Over the years, we have expanded into weaving, knitting, processing, home textiles and
garments. And to ensure quality and cost efficiencies we have integrated backward into
cotton spinning and manufacturing partially oriented yarn through the continuous
polymerisation route. Company also provide embroidered products through Grabal Alok
Impex Ltd., our associate company.

- That is how we have evolved into a diversified manufacturer of world-class home

textiles, garments, apparel fabrics and polyester yarns, selling directly to manufacturers,
exporters, importers, retailers and to some of the world’s top brands.

- Alok has recently entered the domestic retail segment through a wholly owned
subsidiary, Alok Retail India Limited, with a chain of stores named ‘H&A’ that offer
garments and home textiles at attractive price points.

- We have also ventured into the realty space through wholly owned subsidiaries with
investments in some prestigious projects in Mumbai.

Theoretical Background
Sources of Capital Formation
I. Long-term finance
 Owned capital
 Retained earnings
 Share capital
1. Equity share capital
2. Preference share capital
 Debt capital
 Debentures

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  Institutional loans
 Corporate bond
 Goverrnment assistance
 Venture capital

II. Short term finance

Bill discounting
Certificate of deposit
Commercial paper
Treasury bill

Bankers Acceptance
Call Money Markets

III. Medium term finance

Data Analysis

1. Total sources of capital differentiated into short term & long term
capital:

2. Short term Sources of finance:

3. Long term sources of finance

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 Conclusion

1. The various sources of finances studied are:

Long term: Share capital, Debentures, Corporate bonds, Venture capital,

Leasing, Hire purchase, Institutional loans & Retained Earning.

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 Medium term: Bank loans (restricted up to 5 years)

Short term: Bill discounting, Commercial paper, Treasury bills, Call money &
Banker’s acceptance.

2. The sources used by Alok Textile industries are Equity shares, Debentures, Bank
loans, Institutional loans & term loans

Recommendations

1. The company has used only short term bank loans for raising short term
finances; instead of bank loans they can also use other money market

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 instruments such as call money instruments, bill discounting, commercial papers
etc.

2. The company has raised the share capital from equity shares only, they can also
prefer preference shares or corporate bonds as it is the another best option for
raising long term debt.

Bibliography

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 www.wikipea.com

 www.Nseindiia.com

 www.alokindustries.com

 Alok Industries- Annual report 2010

 Financial management- Sudarshan Reddy (Himalaya publication)

 Indian Financial system- M.Y. Khan

 Financial market & services- E.Gordon & K. Natarajan.

Annexure

 Pattern of shareholding

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 Balance sheet

 Bonds sold and purchased during the year

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