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NR Post Graduate Institute of Business Management

Gujarat Technological University


Master of Business Administration Program
Summer Internship Report
“STUDY ON PORTFOLIO MANAGEMENT SERVICES STRATEGIES
AND INVESTORS AWARENESS AND PREFRENCE FOR IT”

At

Motilal Oswal Securities Ltd.

:Submitted By:
JAYDEEPSINGH RAO
Batch 2009-2011
Roll no # 00977
A
RESEARCH PROPOSAL
On

“STUDY ON PORTFOLIO MANAGEMENT SERVICES STRATEGIES


AND INVESTORS AWARENESS AND PREFRENCE FOR IT”

In Partial Fulfillment of the Project Study in Masters


of Business Administration Programme of Gujarat
Technological University
Submitted to:
N.R.Institute of business management

Submitted by: Project Guide:


JAYDEEPSINGH RAO PROF. NISHSTHA ASRANI
BATCH 2009-2011 PROF. NEHA PATEL
Introduction PMS:

In today's complex financial environment,


investors have unique needs which are derived from their risk appetite and financial
goals. But regardless of this, every investor seeks to maximize his returns on
investments without capital erosion. While there are many investment avenues
such as fixed deposits, income funds, bonds, equities etc… It is a proven fact that
Equities as an asset class typically tend to outperform all other asset classes over
the long run. Investing in equities, require knowledge, time and a right mind-set.
Equity as an asset class also requires constant monitoring may not be possible for
you to give the necessary time, given your other commitments. We recognize this,
and manage your investments professionally to achieve specific investment
objectives and not to forget, relieving you from the day to day hassles which
investment require. Motilal Oswal Securities Ltd brings with more than 2 decades of
experience & expertise in equity research and stock broking. We are one of the
leading portfolio service providers, with asset under management worth Rs. 590
Crores. When you invest through our PMS, you can be assured of the best research
being used for the investment decisions. Our equity research has been consistently
ranked very highly in surveys conducted by leading international publications like
“Asia Money” and “Institutional Investor”.
COMPANY PROFILE

Introduction:

Motilal Oswal Securities Ltd. (MOSL) was founded in 1987 as a small


sub-broking unit, with just two people running the show. Focus on customer-first-attitude,
ethical and transparent business practices, respect for professionalism, research-based value
investing and implementation of cutting-edge technology has enabled us to blossom into an
almost 2000 member team.
Today we are a well diversified financial services firm offering a range of financial products and
services such as Wealth Management , Broking & Distribution , Commodity Broking, Portfolio
Management Services , Institutional Equities, Private Equity , Investment Banking Services and
Principal Strategies.
We have a diversified client base that includes retail customers (including High Net worth
Individuals), mutual funds , foreign institutional investors, financial institutions and corporate
clients. We are headquartered in Mumbai and as of March 31st, 2010, had a network spread over
584 cities and towns comprising 1,397 Business Locations operated by our Business Partners
and us. As at March 31st, 2010 we had 6,21,215 registered customers.
Markets and Network:
Founded in 1987 as a small sub-broking unit, MOSL is today
recognized as a well diversified financial services firm, which offers a range of financial
products and services such as wealth management, broking and distribution, commodity broking,
portfolio management services, institutional equities, private equity, investment banking services
and principal strategies.
MOSL hopes to add franchisees with a good track record and a reputation in financial services or
social circles/other business/social circles with a good client base.
MOSL gives marketing and sales support in which one relationship manager will be assigned to
the franchisee for regular research advice and market updates through chat-phone-emails.

Franchise Facts
Operational : 1987,Franchising : 1990,Units : 1,293,Business:Financial services, Investment :
Rs 5-10 lakhs, RETURN ON INVESTMENT (Rol) : 20-200 % , Agreement : NA, Area : 250
sq.ft. Employees Required : 4 .Marketing and business development support on a regular basis,
MOSL also gives a start-up kit comprising of glow sign skin, visiting cards, marketing brochures
to help the franchisees in starting the business. The company also assigns a customer service
executive for routine queries through chat, phone and emails and offers a centralized web-based
back office access to the franchisee. With a focus on research based advisory and superior
customer experience; MOTILAL OSWAL SECURITIES LTD is expanding its reach multifold
to address the needs of a latent market waiting to explode in the next trillion dollar GDP growth
era.
OBJECTIVES OF THE STUDY:

• To study different strategies of PORTFOLIO MANAGEMENT SERVICES of


MOTILAL OSWAL SECURITIES LTD.
• To explore the investors preferences towards Portfolio Management Services.

• STUDY INVESTORS AWARENESS FOR THE SAME

2) RESEARCH DESIGN :
• DESCRIPTIVE RESEARCH

3) RESEARCH METHODOLOGY:
Sources of Data Collection
Primary data and Secondary data from Company and survey.

Data collection:
 Primary data sources:

Questionnaire survey of various respondents in Ahmadabad.

 Secondary data sources:


Data collected from various past surveys, internet and journals.

4) TIME SCHEDULE
• Analyzing research problem, deciding methodology and design – 1 Week,
Data Collection (Secondary) – 3 Weeks, Analyzing the findings – 2 Weeks,
Report and Presentation preparation – 2 Weeks

BENEFICIARIES:
• The Industry, Company and Society.

• This project will be useful to the Companies who deal in PMS.

• This project will provide a better insight to the individuals who want to gain
knowledge about different INVESTMENT STRATEGIES of PMS.
• This project will also be useful for the students for future references.

RESEARCHER’S PROFILE:

The researcher JAYDEEPSINGH is the Student of full time MBA program at N.R. Institute of
Business Management. He has completed his graduation from GUJARAT University,
AHMEDABAD.
PREFACE

Today world become global village due to globalization economic development,


liberalization and e-commerce, which has opened new avenue for development in the industrial
area. So, more demand of able and practical managers who are to solve the problem and face any
kind of challenges.

As a student of M.B.A. program they have to work hard and practical training or summer
training is a part of their study. At M.B.A. level the student are required to choose a subject of
their own choice and they have to deeply research in the topic and prepare a detailed report of
their project. So I choose the research on “To find out awareness and interest about
PMS/EVALUATION OF PMS”

This practical training has given me an existing marvelous experience of visiting


different type of persons. These persons have different beliefs, nature, opinion, which has given
me something new than what I had got during last two semester of M. B. A. I have tried my best
to make this report as much success as possible.

In this report, I have shown different information, solution, and analysis on the above
mentioned topic.
ACKNOWLEDGEMENT

Every project is a masterpiece of hard work and sincere efforts of all those who are
involved in the project. Hard work and success are the two sides of the same coin. I am grateful
to all of them who were a part of my hard work and would definitely be an inevitable part of my
success.

I am grateful to my respected internal guide (PROF.NISHSTHA ASRANI AND


PROF. NEHA PATEL) as well as external guide (VIPUL RAMAIYA AND
FOREM JANI) for guiding and inspiring me and taking me through my tough times. They
played an important role in the successful completion of my project.

As I conclude, I would like to state that just as a positive attitude pays off; my hard
efforts to bring this project to a successful end would also pay off. I hope that this project would
be one of the most significant stepping-stones of my career and would fulfill my aspirations in
every aspect.

JAYDEEPSINGH RAO
EXECUTIVE SUMMERY

The company was founded in 1987 as a small sub-broking unit, with just two people
running the show. Mr. Motilal Oswal is the promoter of Motilal Oswal Securities Ltd. He is a
member of Institute of Chartered Accountants of India and started the business along with the
co-promoter Mr. Raamdeo Agarwal in 1987. Business Administration is his forte, Honesty,
transparency and client goodwill form the core of his business practice

PMS is nothing but Portfolio Management Service where a complement of experienced


professionals invests your money in equity markets and other instruments, with the solitary focus
of growing your money at an appreciable rate.

This project assigned me was initially to find out effective pool of respondents who are
“STUDY ON PORTFOLIO MANAGEMENT SERVICES STRATEGIES

AND INVESTORS AWARENESS AND PREFRENCE FOR IT “

To meet my objective I have selected a method of survey and it was by direct interview,
prior to survey my training was conducted by the company and then fieldwork started.

• In my survey I found that maximum of the respondents invest for the long term 77% while
only 23% invest for the short period of time.

• In my research I found that maximum respondents agree that trust base investment gives
good return 38% people favor it while others say that it does not give good return on
investment

• As per my survey I found that 40% of the respondents are aware about PMS, while 60%
respondents do not aware about PMS
Table of Content
• General Information 1
• Introduction
• Driving Force
• Organization Structure
• MOSL History and Milestone
• End to End Equity Solutions
• Services Provided By MOSL
• Portfolio Management Service 24
• Introduction
• Different Kind Of PMS
• Value PMS
• Features of Value PMS
• Bull’s Eye PMS
• Features of Bull’s Eye PMS
• The Focused Strategy Series – I PMS
• Features of The Focused Strategy – I PMS
• Trillion Dollar Opportunity Strategy PMS
• Features of Trillion Dollar Opportunity Strategy PMS
• Risk Factor
• Nature of Expenses
• Taxation
• Accounting Policies
• Types Of Analysis 56
• Introduction
• Technical Analysis
• Fundamental Analysis
• Wealth Creation Study

• PRIMARY DATA RESEARCH


61

• Objectives of the research

• Research methodology

• ANALYSIS OF QUESTIONNARE
64
• SWOT ANALYSIS
77
• FINDINGS
81
• SUGGESTIONS
83
• BIBLIOGRAPHY
85
• Questionnaire 87
BROAKING INDUSTRY OVERVIEW

Broking Insights
The Indian broking industry is one of the oldest trading industries that has been around even
before the establishment of the BSE in 1875. Despite passing through a number of changes in
the post liberalization period, the industry has found its way towards sustainable growth. With
the purpose of gaining a deeper understanding about the role of the Indian stock broking
industry in the country’s economy, we present in this section some of the industry insights
gleaned from analysis of data received through primary research.
For the broking industry, we started with an initial database of over 1,800 broking firms that
were contacted, from which 464 responses were received. The list was further short listed based
on the number of terminals and the top 210 were selected for profiling. 394 responses, that
provided more than 85% of the information sought have been included for this analysis
presented here as insights. All the data for the study was collected through responses received
directly from the broking firms. The insights have been arrived at through an analysis on
various parameters, pertinent to the equity broking industry, such as region, terminal, market,
branches, sub brokers, products and growth areas.
Some key characteristics of the sample 394 firms are:
• On the basis of geographical concentration, the West region has the maximum
representation of 52%. Around 24% firms are located in the North, 13% in the South and
10% in the East
• 3% firms started broking operations before 1950, 65% between 1950-1995 and 32% post
1995
• On the basis of terminals, 40% are located at Mumbai, 12% in Delhi, 8% in Ahmedabad,
7% in Kolkata, 4% in Chennai and 29% are from other cities
• From this study, we find that almost 36% firms trade in cash and derivatives and 27% are
into cash markets alone. Around 20% trade in cash, derivatives and commodities
• In the cash market, around 34% firms trade at NSE, 14% at BSE and 52% trade at both
exchanges. In the derivative segment, 48% trade at NSE, 7% at BSE and 45% at both,
whereas in the debt market, 31% trade at NSE, 26% at BSE and 43% at both exchanges
• Majority of branches are located in the North, i.e. around 40%. West has 31%, 24% are
located in South and 5% in East
• In terms of sub-brokers, around 55% are located in the South, 29% in West, 11% in
North and 4% in East
• Trading, IPOs and Mututal Funds are the top three products offered with 90% firms
offering trading, 67% IPOs and 53% firms offering mutual fund transactions
• In terms of various areas of growth, 84% firms have expressed interest in expanding their
institutional clients, 66% firms intend to increase FII clients and 43% are interested in
setting up JV in India and abroad
• In terms of IT penetration, 62% firms have provided their website and around 94% firms
have email facility

Terminals
Almost 52% of the terminals in the sample are based in the Western region of India, followed by
25% in the North, 13% in the South and 10% in the East. Mumbai has got the maximum
representation from the West, Chennai from the South, New Delhi from the North and Kolkata
from the East.
Mumbai also has got the maximum representation in having the highest number of terminals.
40% terminals are located in Mumbai while 12% are from Delhi, 8% from Ahmedabad, 7% from
Kolkata, 4% from Chennai and 29% are from other cities in India.

Branches & Sub-Brokers


The maximum concentration of branches is in the North, with as many as 40% of all branches
located there, followed by the Western region, with 31% branches. Around 24% branches are
located in the South and East constitutes for 5% of the total branches of the total sample.
In case of sub-brokers, almost 55% of them are based in the South. West and North follow, with
30% and 11% sub-brokers respectively, whereas East has around 4% of total sub-brokers.

Financial Markets
The financial markets have been classified as cash market, derivatives market, debt market and
commodities market. Cash market, also known as spot market, is the most sought after amongst
investors. Majority of the sample broking firms are dealing in the cash market, followed by
derivative and commodities. 27% firms are dealing only in the cash market, whereas 35% are
into cash and derivatives. Almost 20% firms trade in cash, derivatives and commodities market.
Firms that are into cash, derivatives and debt are 7%. On the other hand, firms into cash and
commodities are 3%, cash & debt market and commodities alone are 2%. 4% firms trade in all
the markets.

In the cash market, around 34% firms trade at NSE, 14% at BSE and 52% trade at both
exchanges. In the equity derivative market, 48% of the sampled broking houses are members of
NSE and 7% trade at BSE, while 45% of the sample operate in both stock exchanges. Around
43% of the broking houses operating in the debt market, trade at both exchanges with 31% and
26% firms uniquely at NSE and BSE respectively.

Of the brokers operating in the commodities market, 57% firms operate at NCDEX and MCX.
Around 20% and 21% firms are solely in NCDEX and MCX respectively, whereas 2% firms
trade in NCDEX, MCX and NMCE.

Products

The survey also revealed that in the past couple of years, apart
from trading, the firms have started offering various investment related value added services.
The sustained growth of the economy in the past couple of years has resulted in broking firms
offering many diversified services related to IPOs, mutual funds, company research etc.
However, the core trading activity is still the predominant form of business, forming 90% of the
firms in the sample. 67% firms are engaged in offering IPO related services. The broking
industry seems to have capitalised on the growth of the mutual fund industry, which was
pegged at 40% in 2006. More than 50% of the sample broking houses deal in mutual fund
investment services. The average growth in assets under management in the last two years is
almost 48%. Company research is another lucrative area where the broking firms offer their
services; more than 33% of the firms are engaged in providing company research services.
Additionally, a host of other value added services such as fundamental and technical analysis,
investment banking, arbitrage etc are offered by the firms at different levels.
Of the total sample of broking houses providing trading services, 52% are based in the West,
followed by 25% from North, 13% from South and 10% from the East. Around 50% of the
firms offering IPO related services are based in the West as compared to 27% in North, 13% in
South and 10% in East. In providing mutual funds services, the Western region was dominant
amounting to 49% followed by 27% from North; The South and the East are almost at par with
13% and 11% respectively.
Future Plans
68% of the firms from the sample have envisaged strategies for future growth. With the middle
class Indian investor as well as foreign investor willing to invest in the stock market, majority
of the firms preferred expansion of institutional and the Foreign Institutional Investor clients in
their areas of growth. Around 84% have shown interest in expanding their institutional client
base. Nearly 51% of such firms are located in the West, 25% in North, 15% are from South and
9% from East. Since the past couple of years, India, along with Korea and Taiwan, has been one
of the preferred destinations for the FIIs. With corporate restructuring, rising market
capitalisation and sectoral friendly policies helping the FIIs, more than two thirds of the firms
are interested in increasing their FII client base. Amongst these firms, West again has maximum
representation of 53%, followed by North with 22%. South has 15% firms and East makes up
for 9%.
INTRODUCTION

Motilal Oswal Securities Ltd is a leading research and advisory based stock broking
house of India, with a dominant position in both institutional and retail broking. MOSL was 'Rated
No.1 – Best recommendations Mid & Small Caps' and won awards in 3 out of 4 categories at the
Starmine India Broker Rankings 2009 from Thomson Reuters. MOSL enters Limca Book of World
Records’ for creating India’s largest dealing room over 26,000 sq ft in Malad at Mumbai.

Asia money Brokers Poll 2008 has ranked MOSL the best Indian brokerage firm. There
are various other categories where they have been rated number one most independent research,
sales and service etc by the Brokers Poll.

The company was founded in 1987 as a small sub-broking unit, with just two people
running the show. Focus on customer-first-attitude, ethical and transparent business practices,
respect for professionalism, research-based value investing and implementation of cutting-edge
technology have enabled them to blossom into an almost two thousand member team.
Their institutional business unit has relationships with several leading foreign
institutional investors (FIIs) in the US, UK, Hong Kong and Singapore. In a recent media report
MOSL was rated as one of the top-10 brokers in terms of business transacted for FIIs. The retail
business unit provides equity investment solutions to more than 557,373 investors through 1308
outlets spanning 555 cities as of June30,2009. Today, MOSL is a well diversified financial
services firm offering a range of financial products and services such as Wealth Management,
Broking & Distribution, Commodity Broking, Portfolio Management Services, Institutional Equities,
Private Equity, Investment Banking Services and, Principal Strategies

Motilal Oswal Securities invests almost 5-10% of its revenue on equity research and
hires and trains the best resources to become advisors to its valued clients. Due to this today
MOSL is a most trusted advisory firm in terms of equity investment.

Their final unique Wealth Creation Study, authored by Mr. Raamdeo Agrawal,
Managing Director, is now in its thirteenth year. Investors keenly await this annual study for the
wealth of information it has on how companies created wealth during the preceding five years.
The organization finds its strength in its team of young, talented and confident individuals.
Qualified professionals carry out different functions under the able leadership of its promoters,
Mr. Motilal Oswal and Mr. Raamdeo Agrawal. Stringent employee selection process, focus
on continuous training and adoption of best management practices drive the quest to achieving
their Vision.
Driving Force

• Our Core Purpose

To be a well respected and preferred global financial services organization enabling


wealth creation for all our customers

• Our Values

• Customer interest is paramount


• Ethical and transparent business practices
• Respect for professionals, associates and business partners
• Research based value investing
• Cutting edge technology to ensure world-class customer service
ORGANIZATION BRANCHES

Motilal Oswal Financial Services Ltd


(MOFSL)

Incorporated on
May 18, 2005

Motilal Oswal
Motilal Oswal investment advisor
Motilal Oswal Motilal Oswal private ltd.
Securities commodities
venture capital (MOIA)
Limited brokers private ltd.
advisor private ltd.
(MOSL) (MOCB) Incorporated on
(MOVC)
March 20, 2006
Incorporated on
Incorporated on Incorporated on
March 26, 1991 Investment &
July 5, 1994 April 13, 2006
merchant banking
Commodity broking
Stock Broking Private equity
(Institutional investment
& Retail) Shareholding:
MOFSL – 75%
Shareholding:
Shareholding: Shareholding:
MOFSL – 97.55%
MOFSL – 99.95% MOFSL – 100%
MOSl HISTORY AND MILESTONE

The story of MOSl goes back many years, when Mr. Motilal Oswal and Mr. Raamdeo
Agrawal met each other as students in a Mumbai suburban hostel in the early eighties. Both the
young chartered accountants hailing from a rural & an unpretentious background had a common
dream ’to build a professional organization with strong value systems, to provide reliable &
honest investment advice to investors’. Thus was born their first enterprise called "Prudential
Portfolio Services" in 1987.

• 2009
• Motilal Oswal Securities Ltd. enters 'Limca Book of Records' for creating India's largest
dealing room in Mumbai
• MOSL was 'Rated No.1 – Best recommendations Mid & Small Caps' and won awards in
3 out of 4 categories at the Starmine India Broker Rankings 2009 from Thomson Reuters

• 2008
• MOSL awarded the prestigious Nasscom - CNBC TV 18 IT User Award – 2008
• MOSL awarded 'The Best Franchisor in Financial Services' by Franchisee World
Magazine 2008 for the second consecutive year
• MOSL creates one of India's largest Equity Dealing & Advisory rooms, spread over
26,000 sq ft in Malad, Mumbai
• Motilal Oswal's India Business Excellence Fund raised USD 125 million, 25% higher
than the initial target of USD 100 million
• D & B survey rates MOSL as India's top Broking House in terms of total number of
trading terminals. MOSL alliance with IDBI Bank to offer Online Trading Services
• AsiaMoney Brokers poll 2007 rates Motilal Oswal Securities Ltd. - Best Overall Country
Research - Local Brokerage

• 2007
• The Strategic partnership between MOSL and SBI - EZtrade - reaches an important
milestone i.e. In less than a year it has managed to sign up more than 10,000 customers
• Starts Knowledge First campaign
• Motilal Oswal was perceived as the most Research driven stock trading player - Starcom
Mediavest Survey
• Introduces a separate brand for Private Client Group – Purple
• Motilal Oswal Commodities Broker Pvt Ltd (MOCBPL) bagges Globoil India's
prestigious 'Outstanding Commodity Broking House 2007' Award
• Motilal Oswal Financial Services ltd. gets listed on the BSE & NSE
• Mr. Motilal Oswal - Chairman and Managing Director has been appointed as a member
of the Managing Committee of Indian Merchant Chambers.
• Motilal Oswal Financial Services Ltd files RHP with SEBI for an IPO
• Motilal Oswal Financial Services Ltd. features as a case study in Harvard Business
School
• Motilal Oswal Financial Services Ltd ties up with Punjab National Bank to offer online
trading to its customers

• 2006
• Motilal Oswal Financial Services Ltd ties-up with State Bank of India to offer online
trading.
• Motilal Oswal Financial Services Ltd was declared as the Best Research House for
Indian Stocks in 2006 as per AQ Research.
• AsiaMoney Brokers poll 2006 rates Motilal Oswal Securities – Most Independent
Research- Local Brokerage
• Introduces unique 1 paisa trading scheme for online Derivatives trading
• Launches the India Business Excellence Fund (IBEF), a US$ 100 mn India focused
Private Equity Fund.
• Investment banking business advises Aban in their majority controlling stake of Sinvest
ASA – one of the largest investment banking deals of 2006.
• Places 9.48% with two leading private equity investors - New Vernon Private Equity
Limited and Bessemer Venture Partners.
• Issues about 13% of company’s equity to employees as ESOPs.
• Acquires a leading south Indian brokerage firm - Peninsular Capital Markets. Also
acquires 1 more brokerage firms in UP.
• Enters Private Equity and Investment Banking businesses.
• Value PMS gives 390% returns to its investors between Feb 2003 and March 2006.
• Another milestone in distribution – 1160 Business locations, over 360 cities, serving over
200,000 customers.
• Employee base crosses 2000 and Business Associate base crosses 780.

• 2005
• AsiaMoney Brokers Poll 2005 rates Motilal Oswal Securities - Best Local Brokerage,
Most Independent Research Brokerage, Best in Sales and Service.
• Launches two new Portfolio Management Schemes - Value Hedging for derivatives and
Discover Value for the Rs. 5 lakh to Rs. 50 lakh category.
• Acquires Capital Deal Stock and Share Brokers, (a proprietary concern based in
Karnataka).
• Deepest distribution in the stock broking segment with about 700 Business locations in
296 cities and about 1, 50,000 customers.
• 2004
• Value PMS delivers a whopping 160% post tax returns for the period ended April 2004.
Bulls Eye PMS - A momentum based PMS launched.
• Start of the Solid Research Solid Advice campaign.

• 2003
• Enters the mutual fund and IPO distribution business.
• MOSt Portfolio Management Services launched with Mr. Raamdeo Agrawal as the
Portfolio Manager. Uniquely structured performance related fees.
• Inquire team is successful in capturing the uptrend in Banking, Auto and Infrastructure
sectors.
• Crossed 15,000 Depository accounts.
• About 200 Business locations in 124 cities servicing over 15,000 Retail and Institutional
Investors.

• 2002
• MOSt consolidates its retail operations & upgrades its IT / Back Office infrastructure to
cater to its growing network of business locations.
• Received the AsiaMoney Award - 2nd best among Indian Brokerage firms.
• Retail network completes coverage of 75 cities in India.
• Direct servicing of HNI clients is initiated. Crosses 10,000 Depository accounts.

• 1999
• Mr. Raamdeo Agrawal starts attending legendary billionaire investor Warren Buffett’s
Annual General Meetings of Berkshire Hathway Inc. He still continues to attend it every
year.
• The Wealth Creation Study started in 1996 culminates into Wealth Creation Seminar and
Awards function in 1998.
• First Stock Broking house to brand its services as a research and advice based broker.
• “Wealth Creation” Campaign started.
• www.MotilalOswal.com launched. First broking house in India to go on the web.
• Becomes a Depository Participant of National Securities Depository Limited (NSDL).
• Inducts Mr. Ivan Mathias, former country head of Watson Wyatt Worldwide, on itsBoard
to Directors to shape HR initiatives.

• 1998
• Mr. Motilal Oswal joins the Governing Board of The Stock Exchange, Mumbai.

• 1995-96
• ”Motilal Oswal” gets incorporated as Motilal Oswal Securities Ltd.
• Wealth Creation Study started. First of its kind study initiated to identify biggest and
fastest wealth creating companies in Indian Stock markets.

• 1994
• MOSt acquires NSE Membership and plans for major expansion of its retail network.
Inquire (Indian Equity Research) is formally created at a 2500 sq. ft office in South
Mumbai with bigger and better quality infrastructure than the corporate office. Since then
nearly 20% of revenue is allocated to research. First Domestic Stock broking house to
have such a strong Research focus. “Motilal Oswal” enters Institutional Broking
business.

• 1990
• After just three years in the business, “Motilal Oswal” is formed through acquisition of
membership on The Bombay Stock Exchange (BSE). Three more memberships taken in
later years.

• 1987
• Mr. Motilal Oswal and Mr. Raamdeo Agrawal lay the foundation of a great partnership
by starting a sub-broking firm. The venture stands out from the rest due to their approach
of Research-based broking even when sub-brokers
.
END TO END EQUITY SOLUTIONS
SERVICES PROVIDED BY MOSL
• MOSL is providing different kind of services under its Broking and
Distribution Services to its clients. They are as follows.

• Advised based Broking on BSE / NSE ( Cash & Derivatives )


• Portfolio Management Services ( PMS )
• Internet Trading ( E Broking )
• Timely & Researched based Investment and Trading Ideas
• Depository Services ( MODES )
• Advised based Mutual Fund
• Commodities
• IPO

• Advise based broking:

Motilal Oswal Securities Ltd. providing advice based equity trading to its clients.
MOSL is providing NSE, BSE and F & O trading facility to its customers. It provides
mainly broking premier Brokerage Service based on fundamental research. Derivatives
(Futures & Options) are ideal instruments to protect your portfolio against risk. You can
trade with index movements, hedge and leverage your portfolio by limiting risk but
keeping your upside unlimited.

Its research based advice is very successful in market. They use Orian software
for trading, and get connectivity through V-sat facility. They are used Bharti
Televenture’s V-sat connection. MOSL have NSE, BSE registration.
• Depositary Services:

In the times of T+2 having a demat account linked to your trading account
becomes really convenient. The non-trading members also can avail of their Depository
services. You receive regular account reports and an efficient service at all times. MOSt
is a member of both NSDL and CDSL and the service is available at all over outlets in
India.

• Account Opening
• Dematerialization
• Re-materialization
• Account Transfer
• Transmission
• Nomination
• Pledging And Hypothecation
• Account Closures

• MOSl E-Broking:

There is nothing more exhilarating, more daring and more rewarding than making
the right trade at the right time. MOSl provides you E-Broking Platform which brings
you a world class experience of online investing. Buying and selling of shares is now just
a click away. A multitude of resources like live quotes, charts, research, advice, and
online assistance helps you take informed decisions. Their robust risk management
system and 128 bit encryption gives you a complete security about money, shares, and
transaction documents.

• MOSl Portfolio Management Service:

Motilal Oswal Securities ltd offers 4 type of PMS schemes meant for investors
with different investment preferences as of June 30th, 2009.

• Value Strategy PMS scheme is meant for investors with long-term interest in the
market.

• Bull’s Eye Strategy PMS scheme is meant for investors who want to take
moderate risk and generate healthy returns from the equity market from time to
time.

• Trillion Dollar Opportunity Strategy PMS Scheme is create wealth for


investors, by investing in focused themes which are part of the next Trillion
Dollar GDP growth opportunity.

• Focused Strategy Series 1 PMS Scheme is create wealth for investor by


investing in stocks that can benefit from growth in earning and a higher P/E or
Higher valuation of assets

Its clients, investor community and some of the most prestigious publications
like Asia money and Institutional Investors amongst others acknowledge Motilal
Oswal Securities as one of the leading research based equity broking house in India.
With about 15% of their revenue invested in their research capability, they have some
of the sharpest resources that produce excellent research insights on companies. The
same is then passed to their highly rated portfolio management and investment
advisory team that works on its personalized investment strategy.

• MOSl Commodities:

Investors looking for a fast-paced dynamic market with excellent liquidity can
now trade in Commodity Futures Market. The Commodity Exchange is a Public Market
forum and anyone can play in these vital Commodity Markets. Motilal Oswal
Commodities Broker (P) Ltd can certainly be a point of entry to the Commodity Markets
for any person. MOCB is a registered trading cum-clearing member of NCDEX.
Participation is not difficult. All you need is to open an account with them. MOCB shall
offer you advice on investments & strategy, provide research and contact you regularly
with trading advice.

• MOSl Mutual Advise based broking:

To enable clients diversify their investments Motilal Oswal Securities Limited


has added another product in its bouquet and will now offer mutual funds.

MOSl mutual team is in close contact with various fund houses and interactive
sessions are held with fund managers. They will provide you regular updates on products
and new schemes. Being one of the stock brokers they keep a close watch on the markets.
Based on your risk appetite, investment horizon and your existing investments they will
suggest investment in mutual fund schemes, which are best, suited to you. The fund and
scheme selection is done after an in-depth research on parameters like risk adjusted
returns, rolling returns, volatility and portfolio churn. They advise a mature and long-
term view on mutual fund investments.
MOSt Mutual doesn’t stop at just that, they go a step further to ensure that you
get the right NAV, your dividends are credited on time and your account statements are
regularly received. You will also receive their monthly newsletter on Mutual Funds
"MOSt Mutual".
INTRODUCTION TO PORTFOLIO
MANAGEMENT SERVICE

• What is PMS?

The full Name of PMS is Portfolio Management Service. Portfolio Management


Service (PMS) is a product wherein a customized investment portfolio is created to suit the
investment objectives of a client. In PMS, the portfolio manager handles the responsibility of
creating and tracking the portfolio. Idea identification, order execution, settlement and
performance reporting is all assumed by the PMS provider. PMS is for an investor who
doesn’t have the time and expertise to manage his portfolio. The client derives the benefit of
the professional and experience of the Portfolio Manager

• Why PMS?

• Investor’s Dilemma
• I have the money & desire to make money
• Now I know or I already knew equity is a good instrument for creating wealth but
• My Busy Schedule does not allow me to have time to study and identify the right
stocks or
• Sometimes, I have tried my luck in the stock market and realized that through I
understand the market to some extend but is not enough to keep coming with winning
investment.
DIFFERENT KIND OF PMS

There are three kinds of PMS provided by Motilal Oswal Securities Ltd. They are as
followed

• Value Strategy PMS


• Bull’s Eye Strategy PMS
• Trillion Dollar Opportunity Strategy PMS
• Focused Strategy Series 1 PMS

These all PMS have their different features. They all are descriptive as under.
VALUE PMS

Value PMS is a scheme meant for investors with a Long Term investment horizon in the
Indian Equity Markets the money management team is headed by Mr. Raamdeo Agrawal, the
founder-director of Motilal Oswal Securities Ltd., and a very well respected investor among the
Indian Investor Community. Mr. Agrawal believes in low portfolio churn and a high “margin of
safety” investment philosophy for long term and sustainable wealth creation. The Value PMS
has been running successfully since February 2003, with clients not only in India, but across the
globe.

Motilal Oswal (MOSl) has a highly satisfied client base both on the Institutional side as
well as on the retail side of High Net worth Individuals and Franchisees’. This has been possible
because of a strong equity research team (Inquire) completely focused on identifying wealth
creating companies. At Inquire, we very clearly understand the difference between value and
price. Our teams of Analysts follow a thorough research process. This process involves
understanding the business dynamics through a continuous interaction with company
managements, suppliers and competitors. In fact, it is this dedication and processes that have
won us international acclaim like Asia Money 2000 Brokers Poll award.

MOSl’s own portfolio, handled by Ramdeo Agrawal has delivered a return of 30% p.a.
compounded over the last five years on a substantial size. It is this success that makes us
confident of handling funds management for external clients.

MOSL’s primary objective is preservation of capital and prevention of any significant


permanent capital loss. The whole stock selection process is geared to find investment ideas with
a sufficient margin of safety, so that even a mediocre sale will fetch good returns. This approach
can be termed as conservative.
They expect that the stock market will give a return of 15% p.a. for the next three to five
years. Their goal will be to do better than this. However, there is no guarantee of positive
returns.

For hassle free custody, banking and settlements MOSL has its own depository service
Motilal Oswal Depository Services. Their own depository will act as your custodian for a
nominal custody fee. MOSL’s in house depository will facilitate MOSL as acting as custodians
and present you a completely hassle free custody. They will handle your Banking (in a special
bank account under POA from you) and trade. Settlement will be done by their trained personnel
who will ensure that all administrative matters are expeditiously handled and reconciled.
Alternatively, you may choose an external custodian with whom we will liaise on your behalf.

Thus you will only have to monitor the portfolio performance through periodic reports
from the company side. All administrative matters will be off your shoulders.

• You can expect the following from MOSL

• Monthly Portfolio Statements including Portfolio Performance Report.


• Monthly Transaction Statements, Bank and DP Statements.
• Quarterly meetings with Mr. Ramdeo Agrawal your portfolio manager Reports on tax
status of the portfolio before the advance tax due dates.

• How it is different from Mutual Fund?

MOSl PMS offers you a unique combination of equity expertise and personalized
service. Your portfolio will be constructed to meet your investment goals at a given level of
risk.
They have a stated objective to keep the churn very low. It is a little known fact that
high turnover takes away a major part of investment returns. You can monitor the portfolio
turnover. These aspects would not be available to you in a mutual fund. Importantly,
MOSL’s fee is significantly lower than the basic management fee levied by a mutual fund
(pre- performance management fee).

• Reason of Performance Fee:

The base asset management fee being charged is much lower than that charged by
others, and that is to cover their running costs. They have consciously kept MOSL fee more
performance linked, as they strongly believe that it will align the interests of the firm and the
client.

You should not be burdened when the portfolio performance is not positive.

• Who can Sign Up?

The following categories are eligible as per SEBI’s rules.

• Individuals
• HUFs
• Companies
• N.R.I.
• For Whom

Portfolio Management Service (PMS) is meant for investor with long-term time
horizon. Low portfolio churn and capital preservation will be key to success. Our investment
decision will cushion in high .margin of safety. So that it leaves sufficient room for investor
to be invested and nurture his portfolio. PMS is a product where in a customized investment
portfolio is created to suit the investment objectives of a client. In PMS, the responsibility of
creating and tracking the portfolio is handled by the portfolio manager. Idea generation,
order execution, settlement and performance reporting is all assumed by the PMS provider.
This service is particularly advisable for investors who cannot afford to give time or don’t
have those expertises for day-to-day management of their equity portfolio. They would
prefer Mr. Raamdeo Agarwal, Portfolio Manager, to manage the same. The client derives the
benefit of the professional expertise and experience of Mr. Raamdeo Agarwal.
FEATURES OF VALUE PMS

• Scheme :

Minimum Portfolio Size: Rs. 25 Lakhs cash or approved securities per


individual or group.

• Fee Structure :

Nature of Fees Option 1 Option 2 Liquid Strategy


One time upfront Fee 0.50% 0.50% Nil
Fixed Management Fees
Assets Under Management Per Annum Per Annum Per Annum
>25 Lakhs 2.75% 1.50%
Rs 25 Lakhs To Rs100 Lakhs 2.50% 1.00% Rs 600p.a.
100 Lakhs and above 2.25% 0.75%
Performance Based Nil 10% Profit Sharing on Nil
Management Fees Higher Water Marking Basis
Exit Load
Exit Between 0-12 months 2.00% 2.00% 2.00%
Exit after 12 months Nil Nil Nil
Custodian Fees 0.25% 0.02%

Brokerage The Portfolio manager will have discretion to appoint any


brokers to execute the transaction for Portfolio management
scheme. Brokerage Rate will be as applicable.
Depositary Charge As Applicable
Registrar and Transfer Fees Nil
Service Tax, Security
Transaction Tax and other As Applicable
Statutory Levels

• Broker: Motilal Oswal Securities Ltd. would be appointed as a broker. Broking as


applicable to broking segment clients.

• Withdrawals: All withdrawals would be with the mutual consent of the client and the
fund manager. The withdrawals may be in form of shares or in cash at the end of the
agreed period.
BULL’S EYE PMS

Bulls Eye is the second product under the AMC. It is a short to medium term investment
product, for which there is a substantial appetite. Hence, Bull’s Eye is launched to fill in this
Gap.

It is to invest in stocks with a time frame of 1-6 months, for a minimum 15- 20% move.
Majority of the corpus, with higher weight age per stock, will be invested in MOST researched
ideas both large cap & mid cap. Technical would be used to TIME the fundamental ideas, and
also to pick momentum based ideas where there is no in-depth fundamental coverage. A lower
weight will be assigned to stocks where we may not have in-house coverage, so as to participate
and capture sharp rallies. The whole idea is to minimize the risk by timing the stock selection.

Though the minimum signing amount is Rs. 50 Lakhs, we give flexibility to the investor
to join at Rs. 25 Lakhs & then scale up based on his comfort & overall performance.

Investors who not only want steady returns irrespective of market volatility, but also
would like to take advantage of short to medium term rallies. Those who have knowledge of the
stock market but lack the discipline to book profits when the going is good or sit on cash
when market looks overheated and cannot track when the stock has run ahead of its
fundamentals in the short term are the ideal investors who should invest in Bull’s Eye.

Booking profits regularly and ability to sit on cash are the key salient features of Bulls
Eye PMS. Idle cash will be invested in liquid mutual funds for the short term.

The scheme aims to deliver 15-20% returns in Volatile Markets, especially when there is
no one-sided trend. In a trended bull market, returns can be substantially better.
• For Whom

The mind of a successful and a busy investor”

There is so much action in the markets nowadays. I love the action and whatever
everybody may say; Stock Market is one place where you can outdo all other investment
instruments. All one needs is in-depth understanding of the markets and the company one
invests in right entry levels and profitable exit points. Unfortunately, all this requires time to
study, which my busy schedule doesn’t allow. There have been so many times when I felt
like encasings my large unrealized gains but got swayed by my Greed.

Can I get a good portfolio manager who can take my funds and invest them
intelligently in equities? Someone, who invests my money in fundamentally strong
companies, take advantage of volatile markets and book profits regularly keeping market
conditions in mind."

Its time you hit the Bull’s Eye with Motilal Oswal Securities Limited.
• Bull’s Eye strategy to better returns . . .

Here is the investment strategy we employ to generate desired returns through our
Bull’s Eye PMS scheme. We believe Investing = Hunting. It’s about identifying the right
stocks, picking and exiting at the right times and then continuing the cycle. Identifying the
right stocks: Our strong proven Fundamental Analysis skill allows us to understand the
profile and the performance of various companies. This allows us to pick the wheat from the
chaff.

• Determining Entry and Exit Points:

After identifying the companies for investment, we resort to technical analysis, read
the market condition and pick up the stocks in opportune sectors. We believe that apart from
the right entry levels, selling at the right time is equally important. Therefore, we employ
similar strategy while exiting the stock and this completes our hunt for good returns.
Moderate risk is the key philosophy: We take moderate risk while making any investment.
Duration of the investment is one to six months. So even while a stock may look
fundamentally strong, the age of our investment in it may depend on the reality based on
technical research along with the prevailing market conditions (markets are overheated, over
expectations build-up etc).

Our, now famous, Wealth Creation Studies have proved that there aren’t even 100
companies out of the 6000 listed on exchanges that create wealth for its investors during the
five year periods. So the task of picking the right stocks is more difficult than most of us can
imagine.
FEATURES OF BULL’S EYE PMS

• Scheme :

Minimum Portfolio Size: Rs. 25 Lakhs cash or approved securities per individual or
group.

• Fee Structure:

Nature of Fees Option 1 Option 2 Liquid Strategy


One time upfront Fee 0.50% 0.50% Nil
Fixed Management Fees
Assets Under Management Per Annum Per Annum Per Annum
>25 Lakhs 2.75% 1.50%
Rs 25 Lakhs To Rs100 Lakhs 2.50% 1.00% Rs 600p.a.
100 Lakhs and above 2.25% 0.75%
Performance Based Nil 10% Profit Sharing on Nil
Management Fees Higher Water Marking Basis
Exit Load
Exit Between 0-12 months 2.00% 2.00% 2.00%
Exit after 12 months Nil Nil Nil
Custodian Fees 0.25% 0.02%
The Portfolio manager will have discretion to appoint any
Brokerage brokers to execute the transaction for Portfolio management
scheme. Brokerage Rate will be as applicable.
Depositary Charge As Applicable
Registrar and Transfer Fees Nil
Service Tax, Security
Transaction Tax and other As Applicable
Statutory Levels
• Broker: Motilal Oswal Securities Ltd. would be appointed as a broker. Broking as
applicable to broking segment clients.

• Withdrawals: All withdrawals would be with the mutual consent of the client and the
fund manager. The withdrawals may be in form of shares or in cash at the end of the
agreed period.
THE FOCUSED STRATEGY SERIES - I PMS

The Focused Strategy – Series I has been is designed to invest in stocks that can that can
benefit from growth in earnings and a higher P/E or higher valuation of assets. The strategy aims
to identify investment opportunities which exhibit a re-rating potential over a 2 year period.

The strategy follows a concentrated portfolio approach, by limiting the number of stocks
in the portfolio to 7. The underlying principle is to pick the best ideas rather than diversification.

The portfolio will aim to invest in fundamentally sound companies that can benefit from
a re-rating. To increase the prospects for out performance, the portfolio will exhibit a preference
for companies that may have been overlooked or are out of favour.

The portfolio follows a bottom-up stock selection approach with an investment horizon
of 2 years. The aim is to identify best candidates for a re-rating potential. The underlying
philosophy of the portfolio is to Buy and Hold until the stocks realize their re-rating potential.

• The portfolio aims identify companies which exhibit the following


Characteristics:

• Companies whose earnings are likely to do better than market consensus.


• Companies benefiting from internal fundamental changes
• New management team or new product launch
• Cost-cutting initiatives or improved pricing
• Merger or acquisition
• Companies benefiting from changes in business environment
• Consolidation or reduction in industry capacity leading to improved pricing
• Shift in consumption patterns or demographic trends
• Out of favor companies fundamentally sound companies that have underperformed for
temporary reasons
• Companies with lower valuation as compared to sector or peers or market

• Portfolio Characteristic:
• Bottom-up stock selection
• Investment in stocks with re-rating potential
• Out of Favour Stocks
• Concentrated portfolio
• Investment horizon: long term (two years)
• Risk: high
• Performance Fee will be Charged at end of 2 years
• Buy and hold philosophy – low portfolio churn
• Reports provided to investors.

• Motilal Oswal Securities provides the following reports to the investors to keep them
appraised with their portfolio performance.
• Monthly transaction statements.
• Monthly portfolio statement specifying portfolio of the investor and gain and loss.
• Yearly portfolio statement certified by a CA.

• Who can Sign in?

Investors from the following categories are eligible to participate in .Discover value.

• Individuals
• Proprietorship firms
• HUF’s
• Partnership firms
• Registered societies
• Registered trusts
• Corporate
FEATURES OF THE FOCUSED STRATEGY
SERIES - I PMS

• Scheme :

Minimum Portfolio Size: Rs. 25 Lakhs cash or approved securities per


individual or group.

• Fee Structure :

Nature of Fees Option 1 Option 2 Liquid Strategy


One time upfront Fee 0.50% 0.50% Nil
Fixed Management Fees
Assets Under Management Per Annum Per Annum Per Annum
>25 Lakhs 2.75% 1.50%
Rs 25 Lakhs To Rs100 Lakhs 2.50% 1.00% Rs 600p.a.
100 Lakhs and above 2.25% 0.75%
Performance Based Nil 10% Profit Sharing on Nil
Management Fees Higher Water Marking Basis
Exit Load
Exit Between 0-12 months 2.00% 2.00% 2.00%
Exit after 12 months Nil Nil Nil
Custodian Fees 0.25% 0.02%

Brokerage The Portfolio manager will have discretion to appoint any


brokers to execute the transaction for Portfolio management
scheme. Brokerage Rate will be as applicable.
Depositary Charge As Applicable
Registrar and Transfer Fees Nil
Service Tax, Security
Transaction Tax and other As Applicable
Statutory Levels

• Broker: Motilal Oswal Securities Ltd. would be appointed as a broker. Broking as


applicable to broking segment clients.

• Withdrawals: All withdrawals would be with the mutual consent of the client and the
fund manager. The withdrawals may be in form of shares or in cash at the end of the
agreed period.

.
TRILLION DOLLAR OPPORTUNITY
STRATEGY PMS

The portfolio is designed to invest in themes /stocks in the small and mid cap segment
which are going to be a part the “NEXT TRILLION DOLLAR GDP GROWTH”. The Portfolio
would target to invest in Small & Mid Cap Opportunities which have the potential of delivering
above-average growth over the next 2-3 years

The investment philosophy is to invest in stocks which are available at reasonable


valuations and promise more than average growth. The portfolio would aim to identify emerging
themes. The Portfolio would attempt to identify emerging themes early and exit when these
when they are fairly discounted.

We firmly believes that markets rewards consistent growth over a period of time and
only after critical size has been achieved by the company. For any stock to get recognized by the
Market and get a desired Valuation one has to wait for the right “Trigger Point”. Perception Re-
rating happens due to:

• Increased Sales volume


• Consistent Growth
• Better Margins
• Growing stakeholders’ confidence

The Product aims to deliver superior returns by investing in Small & Mid cap ideas that
are part of the next Trillion Dollar GDP growth opportunity.
• Portfolio Characteristic:
• Investments in Small and Mid-cap Stocks
• Bottom Up Stock Picking Approach
• Focused Theme Portfolio
• Investment Horizon - Long term (2 to 3 Yrs)
• Benchmark: - CNX Mid Cap
• Buy and Hold Philosophy – low portfolio churn
• Open Ended Portfolio with Exit Fee
• Quarterly Disclosure Of Portfolio

• Investment Philosophy and Strategy


• High Growth Story: Sector and Companies which promise a higher than average growth.
• Reasonable Valuation: Invest in high growth companies at reasonable price / value
• Emerging Themes: Focus on Identifying Emerging Stocks / Sectors
• Buy & Hold Strategy: The Portfolio shall focus on above philosophies and hold them till
it realizes it true market potential.
• Wealth is created by sitting.

• Reports provided to investors.

• Motilal Oswal Securities provides the following reports to the investors to keep them
appraised with their portfolio performance.
• Monthly transaction statements.
• Monthly portfolio statement specifying portfolio of the investor and gain and loss.
• Yearly portfolio statement certified by a CA.
• Who can Sign in?

Investors from the following categories are eligible to participate in .Discover value.

• Individuals
• Proprietorship firms
• HUF’s
• Partnership firms
• Registered societies
• Registered trusts
• Corporate
FEATURES OF TRILLION DOLLAR
OPPORTUNITY STRATEGY PMS

• Scheme :

Minimum Portfolio Size: Rs. 25 Lakhs cash or approved securities per


individual or group.

• Fee Structure :

Nature of Fees Option 1 Option 2 Liquid Strategy


One time upfront Fee 0.50% 0.50% Nil
Fixed Management Fees
Assets Under Management Per Annum Per Annum Per Annum
>25 Lakhs 2.75% 1.50%
Rs 25 Lakhs To Rs100 Lakhs 2.50% 1.00% Rs 600p.a.
100 Lakhs and above 2.25% 0.75%
Performance Based Nil 10% Profit Sharing on Nil
Management Fees Higher Water Marking Basis
Exit Load
Exit Between 0-12 months 2.00% 2.00% 2.00%
Exit after 12 months Nil Nil Nil
Custodian Fees 0.25% 0.02%

Brokerage The Portfolio manager will have discretion to appoint any


brokers to execute the transaction for Portfolio management
scheme. Brokerage Rate will be as applicable.
Depositary Charge As Applicable
Registrar and Transfer Fees Nil
Service Tax, Security
Transaction Tax and other As Applicable
Statutory Levels

• Broker: Motilal Oswal Securities Ltd. would be appointed as a broker. Broking as


applicable to broking segment clients.

• Withdrawals: All withdrawals would be with the mutual consent of the client and the
fund manager. The withdrawals may be in form of shares or in cash at the end of the
agreed period.
RISK FACTOR

The investment made in the securities are subject to market risk and there is no assurance
of guarantee that the value of or return on the investment made will always appreciate, it could
depreciate to an unpredictable extent.

• Following are the risk factors as perceived by management:

• Investment in equities, derivatives and mutual funds are subject to market risks and there
is no assurance or guarantee that the objective of the scheme will be achieved.

• As with any investment in securities, NAV of the portfolio can go up or down depending
upon the factors and forces affecting the capital markets. The performance of the
schemes may be affected by changes in government policies, general levels of interest
rates and risk associated with trading volumes, liquidity and settlement system in equity
and debt market.

• The past performance of the portfolio manager does not indicate the future performance
of the same Scheme in future or any guaranteed returns through these schemes.

• The names of the schemes do not in any manner indicate their prospect or returns. The
performance in the equity scheme may be adversely affected by the performance of
individual companies, changes in the market place and industry specific and macro
economic factors.
• Investment in debt instrument and other fixed income securities are subject to default
risk, liquidity risk and interest rate risk. Consequently, the NAV of the portfolio may be
subject to fluctuation.

• Investment in debt instruments are subject to reinvestment risk as interest rates prevailing
on interest amount of maturity due dates may differ from the original coupon of the bond,
which might result in the proceeds being invested at a lower rate.

• The scheme may invest in non-publicly offered debt securities and unlisted equities. This
may expose the scheme to liquidity risk.

• Engaging in securities lending is subject to risks related to fluctuations in collateral


value/settlement/liquidity/ counter party.

• The scheme may use derivatives instruments like index futures, stock futures and options
contracts, warrants, convertible securities, swap agreements of any other derivative
instruments for the purpose of hedging and portfolio balancing, as permitted under the
regulations and guidelines. Usage of derivatives will expose the plan to certain risk
inherent to such derivatives. As and when the scheme trade in the derivatives market
there are risk factors and issues, concerning the use of derivatives that investors should
understand.

• Derivative products are specialized instrument that require investment techniques and
risk analysis different from those associated with stocks and bonds. The use of a
derivative requires an understanding not only of the underlying instrument but of the
derivatives itself. Derivatives require the maintenance of adequate control to monitor the
transactions entered into, the ability to asses the risk that a derivative adds to the portfolio
and the ability to forecast price or interest rate movements correctly. There is the
possibility that a loss may be sustained by the portfolio as a result of the failure of
another party (usually referred to as the .counter party.) to comply with the terms of the
derivatives contract. Other risks in using derivatives include the risk of miss pricing of
improper valuation of derivatives and the inability 9of derivatives to correlate perfectly
with underlying assets, rates and indices. Thus, derivatives are highly leveraged
instruments. Even as small price movement in the underlying security could have a large
impact on their value. Also, the market of derivative instruments is an ascent in India.
NATURE OF EXPENSES

• Investment Management & Advisory Fees:

Management and Advisory fees charged may be a fixed fee or a return based fee or a
combination of both as detailed in the annexure to the portfolio management services
agreement.

• Custody Fees: NIL

• Registrar & Transfer Agent Fees: NIL

• Brokerage & Transaction cost:

The investment under the portfolio management scheme would be done though
registered members of stock exchange who charge brokerage up to maximum of 2.5% of
contract value. In addition to the brokerage, transaction cost like network charges, turnover
charges, stamp duty, transaction costs, turnover tax, securities transaction tax of any other tax
levied by statutory authority, foreign transaction charges (if any) and other charges on the
purchase and sale of shares, stocks, bonds, debts, deposits. Other financial instruments would
also be levied by the broker (including Motilal Oswal securities ltd.) Any entry or exit loads
(if any) on units of Mutual Funds will also be charged from clients.

• Service Tax: As applicable from time to time.


• Certification and professional charges:

Charges payable for out sourced professional services like accounting, auditing,
taxation and legal services etc for documentation, certifications, attestations required by
bankers or regulatory authorities including legal fees etc.

• Incidental expenses:

Charges in connection with day to day operation like courier expenses, stamp duty,
service tax, postal, telegraphic, opening and operation of bank account or any other out of
pocket expenses an may be incurred by the portfolio manager.
TAXATION

Investment in securities is subject to the provisions of the Indian Income Tax Act, 1961.
Special reference needs to be made in respect of provision related to capital gains, business
income and all other provisions of the Income Tax Act. Provisions related to tax deduction at
source shall also apply, wherever applicable. Interest a dividends would be subject to tax as per
the provisions of the Income Tax Act 1961.
ACCOUNTING POLICIES

The following accounting policies will be applied for the investments of the clients:

• Investment in Equities, Mutual funds and Debt instruments will be valued at closing market
prices of the exchanges (BSE or NSE as the case may be) or the Repurchase Net asset Value
declared for the relevant scheme on the date of the report of any cut off date or the market
value of the debt instrument at its cut off date. Alternatively, the last available prices on the
exchange or the most recent NAV will be reckoned.

• Realize gains/losses will be calculated by applying the first in /first out and / or weighted
average principle. The portfolio manager and the client can adopt any specific norms or
methodology for valuation of investment or accounting the same as may be mutually agreed
between them on a case specific basis.

• For derivatives and futures and options, unrealized gains and losses will be calculated by
marking to market the open positions.

• Unrealized gains / losses are the differences in between the current market values/NAV and
the historical cost of the securities.

• Dividends on shares and units in mutual funds, interest etc. shall be accounted on receipt
basis. The interest on debt instrument shall be accounted on accrual basis.
INTRODUCTION

There are different types of analysis which are used for selecting Portfolio. They are as
followed

• Technical Analysis

• Fundamental Analysis
TECHNICAL ANALYSIS

• Introduction

The methods used to analyze and predict the performance of a company’s stock fall
into two broad categories: fundamental and technical analysis. Those who use technical
analysis look for peaks, bottoms, trends, patterns and other factors affecting a stock’s price
movement and then make buy/sell decisions based on those factors. It is a technique many
people attempt, but few are truly successful at it. The world of technical analysis is huge
today. There are literally hundreds of different patterns and indicators that investors claim to
have success with. We have tried to keep this tutorial as short as possible. Our goal is to
introduce you to the different types of stock charts and the various technical analysis tools
available to investors.

• What Is It?

Technical analysis is a method of evaluating securities by analyzing statistics


generated by market activity, past prices and volume. Technical analysts do not attempt to
measure a security’s intrinsic value; instead they look at stock charts for patterns and
indicators that will determine a stock’s future performance. Technical analysis has become
increasingly popular over the past several years, as more and more people believe that the
historical performance of a stock is a strong indication of future performance. The use of past
performance should come as no surprise. People using fundamental analysis have always
looked at the past performance of companies by comparing fiscal data from previous quarters
and years to determine future growth. The difference lies in the technical analyst’s belief that
securities move according to very predictable trends and patterns. These trends continue until
something happens to change the trend, and until this change occurs, price levels are
predictable. There are many instances of investors successfully trading a security using only
their knowledge of the security’s chart, without even understanding what the company does.
However, although technical analysis is a terrific tool, most agree it is much more effective
when used in combination with fundamental analysis.

• Here are some points to remember about technical analysis:

• Technical analysis is a method of evaluating securities by analyzing statistics


generated by market activity, past prices and volume.

• The advantage of using a bar chart over a straight line graph is that it shows the high,
low, open and close for each particular day.

• One of the most basic and easy to use technical analysis indicators is the moving
average, which shows the average value of a security’s price over a period of time.
The most commonly used moving averages are 20, 30, 50, 100 and 200 - day.

• Support and resistance levels are price levels at which movement should stop and
reverse direction. Think of support/resistance (S/R) as levels that act as a floor or a
ceiling to future price movements.

• There are literally hundreds of different price patterns and indicators out there.

• Technical analysis is a terrific tool, but it is much more effective when combined
with fundamental analysis.
FUNDAMENTAL ANALYSIS

• Introduction

The massive amount of numbers in a company’s financial statement can be


bewildering and intimidating to many investors. On the other hand, if you know how to read
them, the financial statements are a gold mine of information. Financial statement analysis is
the biggest part of fundamental analysis. Also known as quantitative analysis, it involves
looking at historical performance data to estimate the future performance of stocks.
Followers of quantitative analysis want as much data as they can find on revenue, expenses,
assets, liabilities and all the other financial aspects of a company. Fundamental analysts look
at this information to gain insight on a company’s future performance. This doesn’t mean
that they ignore the company’s stock price; they just avoid focusing on it exclusively. In this
tutorial, we’ll show you how to understand the basics of the financial statements (both
quarterly and annual reports), and give you the tools you need to decide which companies
make worthwhile investments. One of the most important areas for any investor to look at
when researching a company is the financial statements. It is essential to understand the
purpose of each part of these statements and how to interpret them.

• Financial reports are required by law and are published both quarterly and annually.

• Management discussion give investors a better understanding of what the company does
and usually points out some key areas where they did well.

• Audited financial reports have much more credibility than un-audited ones.

• The balance sheet lists the assets, liabilities, and shareholder’s equity.
• For all balance sheets: Assets = Liabilities + Equity. These two sides must always equal
each other (balance).

• The income statement includes figures such as revenue, expenses, earnings and earnings
per share.

• For a company, the top line is the revenue while the bottom line is net income.

• The income statement takes into account some non-cash items such as depreciation.

• The cash flow statement strips away all non-cash items and tells you how much actual
money the company generated.

• The cash flow statement is divided into three parts: cash from operations, financing and
investing.

• Always read the notes to the financial statements. They provide more in-depth
information on a wide range of figures reported in the three financial statements.
WEALTH CREATION STUDY

Wealth Creation Study is created by Ramdeo Agrawal. Every Year he organize a wealth
creation Award. The Annual Wealth Creation Study and Awards aim to recognize and felicitate
the ’Biggest’ and ’Fastest’ wealth creators voted by the investors in the capital market. The
awards based on the wealth creation study identities the wealth creators over a five year period.
The period for the current study is 1999 - 2004. Over the years the awards have become an
integral part of the capital market and are keenly awaited event amongst the institutional and
retail investors and managements of corporate India.

MOSt conducts Wealth Creation Seminars across the country regularly to educate
individual investors about our research products, derivatives market, investment strategies and
latest opportunities in the stock markets. Our senior executives, research analysts and investment
strategists address the audience and personally interact with the investors.
PRIMARY DATA RESEARCH

• Objectives of The Research


“STUDY ON PORTFOLIO MANAGEMENT SERVICES
STRATEGIES AND INVESTORS AWARENESS AND PREFRENCE
FOR IT”

• Research Methodology
Research methodology is the scientific and general method through which the
research objective is conducted. The business research methodology includes the sample
size, nature of the study, data collection method, data source, research instruments, sampling
plans etc.

• Type Of Data
There are mainly two types of data primary data and Secondary data.i have used
both.

• Data Source
As I am using here the primary data for research, respondents are the main source for
getting information and secondary data collected from various past surveys, internet and
journals.
• Data Collection
For data collection I had used the questionnaire
• Sampling Plan
 Target Population : People of Ahmedabad City
 Sample Size : 100 Samples
 Sampling Method : Convenience Sampling
1) Do You Invest in Stock Market ?

Invest In Stock Market


Particulars %
Invest 80%
Not Invest 20%

Invest In Stock Market

20%

80%

Invest Not Invest

In my survey I found that most of people up to 80% in Ahmedabad city invest in stock
market. Only 20% people don’t invest in stock market. This shows that the market of
Ahmedabad city is very potential;
2) Out of the following investment options, where do you prefer to invest your savings rate
on the scale of 1 to 5? (5 being the most important factor) ?

MF Equity Debt Bank PMS Govt. Bonds Commodity Insurance Post


64 160 14 164 14 26 20 100 38

Here I found that mostly people fund their investment in safe side, so that they invest in bank
and insurance. They are supposed that equity market is some what risky market and it is
gambling. But it also gives very good return. Currently market is going in bull side, so that they
prefer equity as a good investment instrument.
3) For How Much Period Do You Want To Invest In Stock Market?

Investment Period
Long Term 77
Short Term 23

Investment Period

23%

77%

Short Term Long Term

In my survey I found that maximum of the respondents invest for the long term (77%)
while only 23% invest for the short period of time.
4) If you invest in Equity, on what basis do you select a particular script ?

Tips Friends Company Annual Own Corporate


Research Report Research News
24 38 10 5 15 9

INFLUNCE

In my market survey I found that maximum number of respondents investing influenced


by friends (38%), than they invest by tips (24%) and than by own research (15%), Company
Research (10%), corporate news and annual report 9% and 5% respectively.
5) Do You Aware Of Portfolio Management Service ?

PMS Awareness
Aware 40
Not Aware 60

PMS AWARENESS

As per my survey I found that 40% of the respondents are aware about PMS, while 60%
respondents do not aware about PMS
6) Are You a User Of Portfolio Management Service ?

PMS User
Yes 15
No 25

PMS USER

As per my survey I found that 60 percent people are aware about PMS but only 15
person out of 100 are user of PMS who invest in different PMS schemes
7) In Which Kind Of PMS Do You Invest ?

Investment Limit
50 Lakh 25 Lakh 5 Lakh
26.66% 26.66% 46.66%

As per my survey I found that among the PMS users 46% invest in 5 Lakh plan, while
26% invest in 25 lakh & 50 lakh plan each.
8) How Much Return Do You Expect From PMS Investment ?

Can't say 10-20 20-30 30-40 40-50 50-60 60-70 >70


56 0 38 76 30 0 0 0

Expected Return In %

80
60
40
20
0
Can't 10-20 20-30 30-40 40-50 50-60 60-70 >70
say
% Return

As per my research I found that 38% of the respondents expect that PMS can give 30-
40% return, while 15% people expect 40-50% return. 28% of respondents can’t say anything
about the return from PMS.
9) Do You Agree That PMS Is a Right Way Of Investment ?

Strongly Agree Nuetral Dis-agree Strongly


Agree Dis-agree
22 32 36 9 1

PMS- Right Way To Invest

Strongly
Dis-agree
1% Strongly
Agree
Dis-agree
22%
9%

Nuetral
36%

Agree
32%

As per my study I found that 22% of the respondents are strongly agree that PMS is a
right way of investment. While 32% are agree with the statement. Only 10% are disagreed with
the statement.
10) Which Problem Do You Face While Investing In PMS ?

Big Return Broker


Amount Risk Risk
57 34 9

Problem While Investing in PMS

Broker Risk
9%

Return Risk
Big Amount
34%
57%

As per my market survey I found that most of the people face the problem of big amount
of investment in PMS. 34% respondents give the opinion that return risk is a problem while
investing in PMS, and very few are saying that brokers risk is a problem due to lack of research
& knowledge while investing in PMS.
11) Do You Know About Any Other PMS Provider ?

Knowledge About other PMS Providers


Yes 30
No 70
SSKI IL&FS Angle R- SHCIL Patel India
Broking Money Security Infoline
6 5 4 5 5 2 3

Knowledge Abt Other PM S Provider

Yes
30%

No
70%

As per my survey people also know about the other service provider accept MOSL which
are as above.
12) Monthly Income of Respondent

< 10000 10000- 15000- 20000- 25000- > 50000


15000 20000 25000 50000
44 41 9 5 1 0

As per my survey result I found that among all my respondents 44 respondents are in
income class of <10000 Rs. Per month. 41 respondents are in between 10000-15000 Rs. Per
month. And only 15 respondents are above income of 15000 Rs. per month.
SWOT ANALYSIS
• Strength:-

• A large network is one of the most plus point of Motilal Oswal.

• The leadership of the Motilal Oswal is also very good.

• The Research Team of Motilal Oswal is very powerful. PMS is totally dependent on the
research work so it is very beneficial for the PMS.

• The service provided to customers by Motilal Oswal is also good.

• The company’s total turnover is very high.

• The return given to customers on their investment is high.

• The company has well and experience dealers also.

• The technology used by Motilal Oswal is very advanced.


• Weakness:-

• There is over staffing in company. So many times some of employee has no work and
this effects on their moral for work and wastage of time also.

• The time management of company is not proper.

• Lack of proper co-ordination between two departments of the company.

• Opportunity:-

• The Equity & Derivative market of Ahmedabad is very potential.

• The company has huge database of HNI customers, so company can take benefit for its
services special for PMS

• In Ahmedabad city there is only one branch of Motilal Oswal. Due to this reason the
investors of the other side of Ahmedabad can not take the more benefit of it. So company
can make its other branch at the other part of Ahmedabad also.

• The growth of clients in company is constant.


• The place where the company is situated is a very famous corporate place so it is
beneficial for the company.

• Company arranges seminars regularly for the increasing awareness about the services and
its new products.

• Threats

• The company has to face a cut throat competition

• Rules and regulation of government of India are also very tuff

• The increment in new competitors of company with new technology is also very fast.
FINDINGS

• Market is potential but only few people investors know about the PMS services.

• The Company has no any expert person for the marketing of PMS

• The company’s Tips are highly demanded

• People want to invest in PMS but they are afraid about broker risk and high amount of PMS.

• HNI Clients agree with research based investment gives more return. And as they are long
term investor company should try to convert them in Portfolio investor.

• 20% people are not investing in stock market because they believe that it is gambling and
gambling is sin and it is highly risky.
SUGGESTIONS

• The staff of Back office or dealers should meet their clients and try to find out their problems
and solve it.

• The Company should take employee specialist for PMS.

• The Company should make contact for PMS services with HNI customers.

• The Company can create more awareness about PMS through seminars and personal
relationship.

• Company should make literatures in Gujarati also. Most of people don’t know good English.

• Company should do more advertisement of PMS.

• Follow up the customers on time.

• The solution of customer’s complains should be done on time.


BIBLIOGRAPHY
• Books

• Security Analysis, 5th edition, Graham and Dodd’s, McGraw Hill International Editions,
Finance Series

• Investment Analysis and Portfolio Management, M. Ranganatham & R. Madhumathi,


Person Education (Singapore) Private Ltd.

• Marketing research, David Luck & Rolands Rubin ; 7th edition, PHI.

• Websites

• www.motilaloswal.com
• www.bseindia.com
• www.nseindia.com
• www.e-investing.in
QUESTIONNAIRE

This survey is undertaken as a part of summer training for MBA program. Information provided
for the same will be used only for educational purpose and will not be disclosed anywhere else.

(1) Do you invest in your savings? (Tick any One)

Invest [ ] Not Invest [ ]

(2) Out of the following investment options, where do you prefer to invest your savings rate
on the scale of 1 to 5? (5 being the most important factor)

Mutual fund [ ] Equity [ ]


Debt [ ] Bank [ ]
PMS [ ] Govt. Bonds [ ]
Commodity [ ] Insurance [ ]
Post [ ] Other (pl. specify) [ ]

(3) For how long do you prefer to stay invested?

Long term [ ] Short term [ ]

(4) If you invest in Equity, on what basis do you select a particular script?

Tips [ ] Friends [ ]
Company Research [ ] Annual Report [ ]
Own research [ ] Corporate News [ ]

(5) Are you aware of Portfolio Management Services (PMS)?

Yes [ ] No [ ]
(6)Are you a user of PMS? (Tick any One)

Yes [ ] No [ ]

(7) How much money have you invested in PMS? (Tick any One)u in

Investment more than 50 lakhs [ ]


Investment more than 25 lakhs [ ]
Investment more than 5 lakhs [ ]
None of above [ ]
(8) How much return do you expect from PMS?
10%-20% [ ] 50%-60% [ ]
20%-30% [ ] 60%-70% [ ]
30%-40% [ ] more than 70% [ ]
40%-50% [ ]

(9) Do you agree that PMS is a right way of investment? (Tick any One)

Strongly agree [ ]
Agree [ ]
Neutral [ ]
Disagree [ ]
Strongly disagree [ ]

(10) what problem do you face while investing in PMS? (Tick any One)

Big amount for investment [ ]


Return risk [ ]
Broker risk [ ]
(11) Do you know about any other PMS providers? (Tick any One)

Yes [ ] No [ ]

PERSONAL INFORMATION
Name :

Address :
Contact No :
Monthly Income (Rs.) :
Less then 10000 [ ] 10000 – 15000 [ ]
15000 – 20000 [ ] 20000 – 25000 [ ]
25000 – 50000 [ ] More then 50000 [ ]
Occupation
 Businessman [ ]
 Professional [ ]
• Finance [ ]
• Medical [ ]
• Legal [ ]
• Engineering [ ]
• Other ________________
 Service
• Government [ ]
• Non Government [ ]
 Retired [ ]
Other ____________________

Thank You

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