A

PROJECT REPORT

CONSUMER PERCEPTION ABOUT FINANCIAL PRODUCT OF

HDFC SECURITIES AND SELLING OF FINANCIAL PRODUCTS

Submitted To Prasant Mustagi Submitted By: Amir Faisal

ACKNOWLEDGMENT

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 I take immense pleasure in completing this project and
submitting the final project report. This project has been a platform in
my learning about the marketing of financial products. Along with
this, it has also provided the core platform to acquire knowledge of
the area. I am deeply indebted to my institution KRUPANIDHI
BUSINESS SCHOOL OF, BANGALORE to provide me an
opportunity to undergo a project, which gave me through insights and
experience of the corporate culture, which will always milestone in
the path of my successful career.

The period with HDFC SECURITIES LTD has been full of learning
and sense of contribution toward the organization. I would like to
thank HDFC SECURITIES LTD, BANGALORE for giving me an
opportunity of learning and contributing through this project. Let me
take the opportunity to thank all those people that made this
experience a memorable one.

This is a known fact, a successful project can never be prepared by

the single effort of the person to whom project is assigned, it also
demand the help and guardianship of some conversant persons, who
helped the undersigned actively or passively in the completion of
successful project.

In this context as a student of KRUPANIDHI BUSINESS SCHOOL

OF, BANGALORE I would first of all like to express my gratitude to
MR.GUTAM GOSWAMI (ZONAL AREA MANAGER) AND
ABHISHEK PATEL (AREA SALES MANAGER) for assigning me
such a worthwhile topic “Advisor recruitment and selling of Demat
Account” to work upon in HDFC SECURITIES LTD. I am also

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 thankful to Mr. MANMAT, Ms. Jay INDRANI, and Ms. Nitika for their
co-operation and for imparting wonderful information.

-------------------------

Table of content

Sr. no Contents Page No.

1 Executive Summary 5
2 Objective And Scope 11
3 Company profile 12
4 Types of Financial Instruments 18
Stock Broking 19
Mutual Fund 24
Insurance 37
5 Research Methodology 51
6 Data Interpretation and Analysis 54
7 Findings 63
8 Limitations 65
9 Recommendations and Suggestions 66
10 Conclusion 67
11 Bibliography 68
12 Annexure (1)
Questionnaire 69

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 Executive Summary

During the summer project training, I had to recruit

Advisor as many as possible. The objective was “To
Recruit the Financial Advisor for HDFC
SECURITIES LTD” for the purpose of selling D-MAT
A/C.
As the company wants to become the Dominant

Player built on trust by world-class people and service.

Company hopes to achieve this by the help of:-

 Understanding the Needs of Customer

 Growth and learning for our Employees.

 Building transparency.

 Leveraging Technology.

They also have 5 core values, which has to be

followed and has to be committed towards it by the

employees. These values are as under:-

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  Integrity

 Customer First

 Boundary less

 Ownership

 Passion

To recruit the Financial Advisor, I had to do so many

marketing activities. Marketing activities of HDFC

securities is used to recruitment of adviser such as:

 Tele Calls

 Cold Canvassing

 Pamphlet Distribution

 Door to Door Marketing

For Selling D-mat product

One of the most important activities for selling D-

mat a/c is Channel Partner/ Financial Advisor. These

advisors are the major marketing activity. They are

qualified of criteria of advisor.

For this channel partner HDFC securities gives facilities

such as:

 Telephone

 Xerox

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  Fax

Criteria for Selecting Adviser(Agent)

While recruiting advisors for HDFC securities we

have to look for the prospect that has to fulfill the

mentioned criteria below.

Age limit : 18 Yrs

Education : Under graduate

Marketing Activities of HDFC securities

The Marketing function at HDFC securities

covers an array of activities - brand and media

management, channel support, direct marketing

and corporate communications. The Brand and

Communications team is in charge of advertising,

consumer research, media planning & buying and

Public Relations; that helps develop and nurture HDFC

securities corporate identity while effectively

communicating its varied product offerings to the

customer. Channel marketing provides support to the

sales force by streamlining the design and

development of collaterals and sales tools across

distribution channels.

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 The Direct marketing team was set up to

generate high quality leads for profitable business. The

team achieves this through target database acquisition

and communicating customized product

information through e-mailers, telemarketing and

innovative direct mailers.

Marketing activities of ICICI prudential is used to

recruitment of adviser such as: Tele Calls, Cold

Canvassing, and Pamphlet Distribution, Door to Door

Marketing.

Tele Calls

It is the one of the important tools used for the

approach to the customer. It is not natural market

activities. Through tale calling we have to call the

customer and tell them about the business opportunity.

And if possible fix appointment or call them office.

Cold Canvassing

This is one of the fastest way and effective tool

to recruit advisers for the company. Under this method,

trainee was sending out in the fieldwork and then to

contact general public. By doing these activities I find

out cold, warm, & hot client. After differentiating them I

have convert them cold client to warm client, warm

client to hot client.

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Pamphlet Distribution

Pre-printed pamphlet was given to the trainees

to distribute in the market. All this marketing activities

are used by HDFC securities

These are the marketing activities of HDFC securities

for searching and recruitment of adviser.

Following profile, who can become Advisor:

 Retired People

 Housewives

 Students

 Working Employee

 C.O.I

 V.R.S

 Social Workers

COMPANY PROFILE

HDFC Bank Limited.

The Housing Development Finance Corporation

Limited (HDFC) was amongst the first to receive an ‘in

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principle’ approval from the Reserve Bank of India
(RBI) to set up a bank in the private sector, as part of
the RBI’s liberalization of the Indian Banking Industry in
1994. The bank was incorporated in The Housing
Development Finance Corporation Limited (HDFC) was
amongst the first August 1994 in the name of ‘HDFC
Bank Limited’, with its registered office in Mumbai,
India.
HDFC is India’s premier housing finance company and
enjoys an impeccable track record in India as well as in
international markets. Since its inception in 1977, the
Corporation has maintained a consistent and healthy
growth in its operations to remain the market leader in
mortgages. Its outstanding loan portfolio covers well
over a million dwelling units. HDFC has developed
significant expertise in retail mortgage loans to different
market segments and also has a large corporate client
base for its housing related credit facilities. With its
experience in the financial markets, a strong market
reputation, large shareholder base and unique
consumer franchise, HDFC was ideally positioned to
promote a bank in the Indian environment business
focus. HDFC Bank’s mission is to be a World-Class
Indian Bank. The objective is to build sound customer
franchises across distinct.
The bank is committed to maintain the highest level of

ethical standards, professional integrity, corporate

governance and regulatory compliance. HDFC Bank’s

business philosophy is based on four core values –

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1. Operational Excellence, 2

Customer Focus,

3. Product Leadership, 4.people

HDFC Bank is a young and dynamic bank, with a youthful and

enthusiastic team determined to accomplish the vision of becoming a
world-class Indian bank.

Our business philosophy is based on four core values - Customer Focus,

Operational Excellence, Product Leadership and People. We believe
that the ultimate identity and success of our bank will reside in the
exceptional quality of our people and their extraordinary efforts. For this
reason, we are committed to hiring, developing, motivating and retaining
the best people in the industry

MISSION AND BUSINESS STRATEGY OF HDFC

BANK

Our mission is to be "a World Class Indian Bank",

benchmarking ourselves against international
standards and best practices in terms of product
offerings, technology, service levels, risk management
and audit & compliance. The objective is to build sound
customer franchises across distinct businesses so as to
be a preferred provider of banking services for target
retail and wholesale customer segments, and to
achieve a healthy growth in profitability, consistent with
the Bank's risk appetite. We are committed to do this
while ensuring the highest levels of ethical standards,
professional integrity, corporate governance and
regulatory compliance.

HDFC business strategy emphasizes the following:

Increase our market share in India’s expanding banking and financial

services industry by following a disciplined growth strategy focusing on
quality and not on quantity and delivering high quality customer
service.
Leverage our technology platform and open saleable systems to

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 deliver more products to more customers and to control operating
costs.
Maintain our current high standards for asset quality through
disciplined credit risk management.
Develop innovative products and services that attract our targeted
customers and address inefficiencies in the Indian financial sector.
Continue to develop products and services that reduce our cost of
funds.
Focus on high earnings growth with low volatility

HDFC Securities

HDFC Securities, a trusted financial service provider

promoted by HDFC Bank and JP Morgan Partners and

their associates, is a leading stock broking company in

the country, serving a diverse customer base of

institutional and retail investors

HDFC securities provide investors a robust platform to trade in Equities in NSE

and BSE, and derivatives in NSE. Our website will support you with the highest
standards of service, convenience and hassle-free trading tools.

Our research team tracks the economy, industries and companies to provide you
the latest information and analysis. Our content offers financial information,
analysis, investment guidance, news & views, and is designed to meet the
requirements of everyone from a beginner to a savvy and well-informed trader.
With HDFCsec.com, you get:

Speed :
Our state-of-the art technology enables to instantly trade on the BSE and NSE.

Convenience :
You can trade with us online or on the phone from the convenience of your
home or office. Use the 3-in-1 Advantage account to seamlessly move funds

11
and securities across your bank, demat and trading account. This way, you do
not have to issue cheques or delivery instructions.

Transparency :
With our trusted pedigree, you can be assured that you get the best services in
a transparent manner. By broking with us, you are in total control of your funds
and stocks.

Expertise :
Our Group has decades of experience in providing financial services to
customers in a transparent and trusted manner. We have a dedicated,
motivated and experienced team of professionals to provide you top class
service.

Timely and Relevant Information :

We realize the importance of making information available to you as it
happens. Empowered with the latest news, developments and research, you
will be able to take informed decisions.

Your Interest :
For us, your interest comes first. We endeavor to provide high quality
investment services, in a simple, direct and cost-effective way to help you
achieve your financial goals.

HDFC securities Offerings

1. Online trading for Resident & NRIs.

2. Cash-n-Carry on both NSE and BSE by taking delivery of shares.

3. Day trading, on both NSE and BSE, wherein all the positions are compulsorily squared
trading day.

4. Trade Futures & Options on the NSE.

5. Online IPOs.

6.Telephone - based trading for both Equities, Derivatives and IPOs

Why choose HDFC securities?

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 • Dial-a-Share and Internet Options.*
• Online: Cash & Carry on NSE & BSE*
• Day Trading on NSE & BSE*
• Inter-settlement trading on NSE & BSE*
• Derivative Trading on NSE*
• Online IPO application*
• Dial-a-Share
• Dedicated Telebroking Nos. (BSNL & RIM)**
• Dedicated Toll Free Customer Care Nos.
• Dedicated HNI desk
• Trading on NSE, BSE, Margin & Derivatives
• Daily Research Reports &personalized service
• Research Report based Recommendations
ABOUT SHARES.
In financial markets, a share is a unit of account for various financial
instruments including stocks, mutual funds, limited partnerships,
and REIT's. In British English, use of the word shares in the plural to
refer to stock is so common that it almost replaces the word stock
itself. And especially in American English, the plural stocks is widely
used instead of shares, in other words to refer to the stock
(or perhaps originally stock certificates) of even a single company.
Traditionalist demands that the plural stocks be used to refer only to
stock of more than one company are rarely heard
The income received from shares is called a dividend, and a person
who owns shares is called a
A share is one of a finite number of equal portions in the capital of a
company, entitling the owner to a proportion of distributed, non-
reinvested profits known as dividends and to a portion of the value
of the company in case of liquidation. Shares can be voting or non-
voting, meaning they either do or do not carry the right to vote on

13
the board of directors and corporate policy. Whether this right exists
often affects the value of the share. Voting and Non-Voting shares
are also known as Class A and B shares.

SEBI (Securities Exchange Board of India)

In 1988 the Securities and Exchange Board of India

(SEBI) was established by the Government of India
through an executive resolution, and was subsequently
upgraded as a fully autonomous body (a statutory
Board) in the year 1992 with the passing of the
Securities and Exchange Board of India Act (SEBI Act)
on 30th January 1992. In place of Government Control,
A statutory and autonomous regulatory board with
defined responsibilities, to cover both development &
regulation of the market, and independent powers has
been set up. Paradoxically this is a positive outcome of
the SecuritiesScamof1990-91.

The basic objectives of the Board were identified

as:

• To protect the interests of investors in securities;

• To promote the development of Securities
Market;
• To regulate the securities market and
• For matters connected therewith or incidental
there to.

Since its inception SEBI has been working targeting the

securities and is attending to the fulfillment of its
objectives with commendable zeal and dexterity. The
improvements in the securities markets like
capitalization requirements, margining, establishment

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of clearing corporations etc. reduced the risk of credit
and also reduced the market.

SEBI has introduced the comprehensive regulatory

measures, prescribed registration norms, the eligibility
criteria, the code of obligations and the code of conduct
for different intermediaries like, bankers to issue,
merchant bankers, brokers and sub-brokers, registrars,
portfolio managers, credit rating agencies, underwriters
and others. It has framed bye-laws, risk identification
and risk management systems for Clearing houses of
stock exchanges, surveillance system etc. which has
made dealing in securities both safe and transparent to
the end investor.

Another significant event is the approval of trading

in stock indices (like S&P CNX Nifty & Sensex) in
2000. A market Index is a convenient and effective
product because of the following reasons:

• It acts as a barometer for market behavior;

• It is used to benchmark portfolio performance;
• It is used in derivative instruments like index
futures and index options;
• It can be used for passive fund management as
in case of Index Funds.

Two broad approaches of SEBI is to integrate the

securities market at the national level, and also to
diversify the trading products, so that there is an
increase in number of traders including banks, financial
institutions, insurance companies, mutual funds,
primary dealers etc. to transact through the Exchanges.
In this context the introduction of derivatives trading
through Indian Stock Exchanges permitted by SEBI in
2000 AD is a real landmark.

SEBI appointed the L. C. Gupta Committee in 1998 to

recommend the regulatory framework for derivatives
trading and suggest bye-laws for Regulation and
Control of Trading and Settlement of Derivatives
Contracts. The Board of SEBI in its meeting held on
May 11, 1998 accepted the recommendations of the
committee and approved the phased introduction of
derivatives trading in India beginning with Stock Index

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Futures. The Board also approved the "Suggestive
Bye-laws" as recommended by the Dr LC Gupta
Committee for Regulation and Control of Trading and
Settlement of Derivatives Contracts.

SEBI then appointed the J. R. Verma Committee to

recommend Risk Containment Measures (RCM) in the
Indian Stock Index Futures Market. The report was
submitted in November 1998.

However the Securities Contracts (Regulation) Act,

1956 (SCRA) required amendment to include
"derivatives" in the definition of

securities to enable SEBI to introduce trading in

derivatives. The necessary amendment was then
carried out by the Government in 1999. The Securities
Laws (Amendment) Bill, 1999 was introduced. In
December 1999 the new framework was approved.

Derivatives have been accorded the status of

`Securities'. The ban imposed on trading in derivatives
in 1969 under a notification issued by the Central
Government was revoked. Thereafter SEBI formulated
the necessary regulations/bye-laws and intimated the
Stock Exchanges in the year 2000. The derivative
trading started in India at NSE in 2000 and BSE started
trading in the year 2001.

COMPANY’S PRODUCT

D-mat Account Opening Charge (inclusive of

stamp charges)

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 Resident Indian: Rs. 799/- (Open Market)

Rs. 399/- (HSL/HDFC/Bank

Employee)

Rs. 399/- (Classic / Preferred)

Rs. 499/- (Senior Citizen / Corp

Sal >25k)

Rs. 2250/- NRI Indian:

Brokerage:

Delivery based transactions: @ 0.50% of the

transaction value,

Or a minimum brokerage of Rs.25/- (Rs.100/-

for NRIs)

Square off Trades: @ 0.05% on both legs

(Minimum transaction value is Rs. 1000/-)

Other levies: Service Tax: 12.36% (on brokerage)

STT (Service Transaction Tax): 0.125% (on

transaction value for delivery based) and

0.025% (for square off trades: Only Sell Side)

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TYPES OF D-mat a/c

Entity 1-in-1 2-in-2 3-in-

3
Individual Yes Yes Yes
HUF Yes Yes Yes
Corporate Yes Yes Yes
NRI(Non US Yes Yes Yes
Based)
Partnership Yes Yes Yes
Trust Yes Yes Yes

OBJECTIVE

Primary Objective:-
 To find out the people who is willing to be an
agent for HDFC Securities.
 To find out the potential customer of HDFC
Securities who involved in trading activities and
generate the business for HDFC Securities.

Secondary Objective:-

 To find out that what is the awareness

percentage of different financial products
among people.

 To create the image about HDFC

financial product.

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  To find out what are the factors
responsible for choosing any investment
in any financial product.

 To find out interest of people to be an

agent for HDFC Securities.
 To promote HDFC Securities financial
product.

Scope of Study:-

1. To analyze the potential for various HDFC

securities products.

2. To reduce the number of walk in customers for

minor inquiries

Aspect of Research Methodology

Research methodology is the way to systematically

solve the research problem. Research methodology

just does not deal with research methods but also

consider the logic behind the methods. It may be

understood as the science of studying how research is

done scientifically and systematically. In it we study the

various steps that are generally adopted by the

researcher in study of his research problem along with

the logic behind them. It is necessary for the research

to know the research method and technique. He must

19
also clearly understand the procedure would apply to

problem given to him. All this means that it is necessary

for the researcher to design the methodology from

problem to problem.

So, the research methodologies adopted by

the researcher in this project are as follows:

RSEARCH METHODOLGY

Research is the process of systematic and depth study of

any particular topic, subject or area of investigating backed
by collection, presentation and interpretations of the
relevant details or data research methodology is a way to
systematically solve the research problem. The various
steps adopted by the researcher is studying his problem
along with logic behind them.

Research process-steps

 Problem definition
 Research design
 Data collection
 Data analysis
 Interpretation of results

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 Reporting

Date collection: - Data collected from official website of

KARVY (www.karvy.com)

Data collected by referring to the database already

existing in the company

Data is being collected from various sources like:-

• Observation Method

• Telephonic Information

Primary Sources

Questionnaires to obtain the perception of investors.

Secondary Sources

Statistical data from newspapers and internet.

Research Method which we used:

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 Type of Research

Exploratory Research Conclusive Research

Descriptive Research

We chose Conclusive Research for our project because

our objective was clear. We made hypotheses and tested it
by doing research.
In conclusive Research we chose Descriptive Research
because our purpose was to collect data for definite
purpose. We have to find out behavior of people regarding
different financial products.

Sampling Technique which we use :

SAMPLE SIZE:

The sample size is 200 customers HDFC

Securities.

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 a. Sampling Methods: A sample is the

representative of the populations which will

predict the behaviors of the whole universe.

b. The sampling size put under 2 categories:

Probability Sampling and

Non Probability Sampling.

Sample unit

Researcher has taken the customers of HDFC

securities.

Sampling method

The researcher adopted the convenient sampling

method. In this method the sampling unit is chosen

primarily on the basis of convenience to the

investigators. In this type of sampling the researcher

selects the item for the sample deliberately; his choice

concerning the items remains supreme.

EXECUTION OF THE PROJECT:

It is very essential in the research process to know the

accuracy of the finding’s which

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depends on how systematically the study has been

carried out so that it can make sense.

We have executed the project after prior discussion

with our guide and structured in the

following steps:

a. Preparation of a questionnaire.

b. The focal point of the designing the

questionnaire was to comprehend the current

investment scenario.

c. This questionnaire was primarily aimed to

respondents who belong to the service and

business class people.

d. The questionnaires were discussed through

personal interface with the respondents.

Types of Sampling
Techniques

Non Probability
Probability Sampling
Sampling Techniques
Techniques

Convenience
Judgmental Sampling
Sampling

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In sampling Techniques We choose Non Probability
Sampling Technique in which not every element of the
target population has a chance of being selected
because the inclusion of elements in a sample is left to
the discretion of the researcher.

We choose Non Probability Technique because of our

decision which was based on convenience and
judgment.

We used questionnaire as a instrument for data

collection.

Introduction Of Financial Product

Stock Broking

Share Market Trading includes buying and selling of

company shares either through Stock Exchange or
Over-the-Counter (OTC).It is also called equity Share.
Share Market is the market for securities where
organized issuance and trading of shares takes place
either through exchanges or over-the-counter in
electronic or physical form. It plays an important role in
channelizing capital from the investors to the business
houses which consequently leads to the availability of
funds for business expansion.

Share Market Trading

Basically, Share Market can be divided into two parts:-

1. Primary Market:-

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 It is the market where new issues of
securities are offered to the investors.

2. Secondary Market:-
An investor of a secondary market buys a
security from another participant of the same and not
from any issuing corporation (as in case of Primary
Market).

Shares in the Share Market are either traded

through:-

(a) Stock Exchange:-

These are organized market

places where stocks, bonds are other equivalents
are traded between the buyers and sellers where
exchange acts as a counter-party to both the
participants in case of any default. The contracts
are standardized and not customized ones. For
example, NYSE, NASDAQ, NSE, NIKKEI, etc.

(b) Over-the -Counter (OTC):-

These are not centralized exchanges. Here, the
trade takes place through a network of dealers.
Generally, the OTC contracts are bilateral
customized contracts and not standardized ones.

The shares traded are Common Stocks.

Common Stocks:-

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Gives an ownership right to the holders of the stock
and hence the share holders are entitled to the
earnings of the company according to their stake.
Holders also get dividends on those stocks as and
when given by the company. Liquidity of common
stocks are very high and can be bought and sold at any
time of the market hours.

Important Participants of Share Market Trading

are:-
Buyer:- An investor who buys a script in the belief that
the market will rise. If his hinge becomes right then he
makes profit otherwise he suffers loss.

Seller:- Seller of a stock sells in the hope that the

stock price will go down.

Stock Broker:- Brokers are persons or firms who

execute buy/sell order on behalf of the investors and
charge a commission for rendering the service.

Share Trading are done in three ways:-

(a) Offline Share Trading :- In this form of trading the

customer either goes to the share broker's place and
sits before the share trading terminal and asks the
dealer to place orders in his account or rings the share
broker, asks the share quotes and other relevant
information, and accordingly places orders over the
phone.

(b) Online Share Trading :- The client could avail the

27
share market and could place his order on his own from
any place he wants, provided he has a computer with
an Internet connection.

Open Outcry Trading

Here, the investors put their orders through

the brokers and these share brokers in turn place and
execute orders on behalf of them on the floor of the
exchange. These brokers gather in a particular place
on the trading floor known as Trading Post. There is a
person called as the Specialist present in the trading
post who does the matching of the buy and sell orders.
This type of auction method is called Open Outcry
Method.

There are mainly two types of trading :-

1.Intra day trading

They buy and sell stocks during the same day.

Intra day Traders are of two types:-

i.Scalp Traders:-
Investors who perform many trades per day for
scalping out small profits out of the bid-ask spread from
each trade are known as scalp traders.

ii.Momentum Traders
Investors who pounce on those stocks which move
significantly in one direction and book desired profit are
called momentum traders. They do this within a day.

28
2.Delivery trading:-
The investor buys the share for holding purposes.

Delivery Traders are: -

i. Technical Traders :-

They believe that buying/selling signals are present

within the graphs and charts of the stock.

ii. Fundamental Traders:-

They perform trade on the basis of
study of fact-sheets of the company like historical profit
graph, balance sheet, anticipated earning reports, stock
splits, mergers and acquisitions, etc.

iii. Swing Traders:-

They are basically fundamental
traders who take delivery of trades for a span of short
period generally more than one day.

Mutual Fund

Concept

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“Mutual fund is vehicle that enables a number of
investors to pool their money and have it
jointly managed by a professional money
manager.”

A Mutual Fund is a trust that pools the savings of a

number of investors who share a common financial
goal.

The money thus collected is then invested in capital

market instruments such as shares, debentures and
other securities.

The income earned through these investments and the

capital appreciation realized are shared by its unit
holders in proportion to the number of units owned by
them.

Mutual Fund companies are known as asset

management companies. They offer a variety of
diversified schemes. Mutual Fund acts as

investment companies. They pool the savings of

investors and invest them in a well-diversified portfolio
of sound investments.
Mutual funds can be broken down into two basic
categories: equity and bond funds.
Equity funds invest primarily in common stocks, while
bond funds invest mainly in various debt instruments.

30
 Within each of these sectors, investors have a myriad
of choices to consider, including: international or
domestic, active or indexed, and value or growth, just
to name a few.
We will cover these topics shortly. First, however, we're
going to focus our attention on the “nuts and bolts” of
how mutual funds operate.

Characteristics of a Mutual Found

The following are the characteristics of the mutual

funds:-

 A mutual fund belongs to the investors who have

pooled their funds. The ownership of the mutual fund is
in the hands of the investors.
 Investment professionals and other service
providers, who earn a fee for their services, from the
fund, manage the mutual fund.

 The pool of funds is invested in a portfolio of

marketable investments. The value of the portfolio is
updated every day.
 The investors share in the fund is denominated
by “units”. The value of the units changes with change
in the portfolio’s value, every day. The value of one unit
of investment is called as the Net Asset Value or NAV.

Advantages of Mutual Fund:

31
 Every investment has advantages and disadvantages.
But it's important to remember that features that matter
to one investor may not be important to you. Whether
any particular feature is an advantage for you will
depend on your unique circumstances. For some
investors, mutual funds provide an attractive
investment choice because they generally offer the
following benefits:

 Professional Management: The primary

advantage of funds (at least theoretically) is the
professional management of your money. Investors
purchase funds because they do not have the time or
the expertise to manage their own portfolio. A mutual

32
 fund is a relatively inexpensive way for a small investor
to get a full-time manager to make and monitor
investments.

 Portfolio Diversification: A proven principle of

sound investment is that of diversification, which is the
idea of not putting all eggs in one basket. By investing
in many companies, the mutual funds protect
themselves from drop in value of shares. Majority of
people consider diversification as the major strength of
mutual funds.
 Reduction of Risk: Risk in investment is as to
recovery of the principal amount and as to return on it.
Mutual funds, on both

fronts provide a comfortable situation for

investors. The expert supervision, diversification,
and liquidity of units ensured in mutual funds
minimize the risks.

 Economies of Scale: Mutual fund shaving

large funds at their disposal avail economies of scale.
The brokerage fee or trading commission may be
reduced substantially. The reduced transaction costs
obviously increases the income available for investors.

 Liquidity: A distinct advantage of mutual fund

over other investments is that, there is always a market
for its units/shares. Moreover, Securities & Exchange
Board of India requires that mutual funds in India have
to ensure liquidity.

33
 Safety of Investment: Besides depending on
the expert supervision of fund managers, the legislation
in a country (SEBI) also provide for safety of
investments. Mutual funds have to broadly follow the
laid down provisions for their regulation. SEBI acts as a
watch dog and attempts whole heartedly to safeguard
investor’s interests.

 Choice: Mutual funds come in a wide variety of

types. Some mutual funds invest exclusively in a
particular sector (e.g. energy funds), while others might
target growth opportunities in general. There are
thousands of funds, and each has its own objectives
and focus. The key is for you to find the mutual funds
that most closely match your own particular investment
objectives.

 Convenience: When you own a mutual fund,

you don't need to worry about tracking the dozens of
different securities in which the fund invests; rather, all
you need to do is to keep track of the fund's
performance. It's also quite easy to make monthly
contributions to mutual funds and to buy and sell
shares in them.

 Simplicity: Buying a mutual fund is easy! Pretty

well any bank has its own line of mutual funds, and the

34
 minimum investment is small. Most companies also
have automatic purchase plans whereby as little as
$100 can be invested on a monthly basis.

 Tax Shelter: Depending on the schemes of

mutual funds, tax shelter is also available under section
80C. The returns from the mutual funds are also
eligible for favorable tax treatment.

Disadvantages of Mutual Fund:-

There are more benefits to mutual fund investing, but

you should also be aware of the drawbacks associated
with mutual funds. They are as follows:

 Professional Management:
Did you notice how we qualified the
advantage of professional management with the word
"theoretically"? Many investors debate over whether or
not the so-called professionals are any better than you
or I at picking stocks. Management is by no means
infallible, and, even if the fund loses money, the
manager still takes his/her cut.

 No control over costs:

Since investors do not directly monitor the

fund’s operations they cannot control the cost
effectively. Regulators therefore usually limit the

35
 expenses of mutual funds. Investors must pay
sales charges, annual fees, and other expenses
regardless of how the fund performs. And,
depending on the timing of their investment,
investors may also have to pay taxes on any
capital gains distribution they receive — even if
the fund went on to perform poorly after they
bought shares.

 Dilution:

Although diversification reduces the amount of

risk involved in investing in mutual funds, it can
also be a disadvantage due to dilution. For
example, if a single security held by a mutual
fund doubles in value, the mutual fund itself
would not double in value because that security
is only one small part of the fund's holdings. By
holding a large number of different investments,
mutual funds tend to do neither exceptionally
well nor exceptionally poorly.

 Taxes:

When making decisions about your money, fund

managers don't consider your personal tax
situation. For example, when a fund manager
sells a security, a capital-gain tax is triggered,
which affects how profitable the individual is
from the sale. It might have been more
advantageous for the individual to defer the
capital gains liability.

36
 No Insurance:

Mutual funds, although regulated by the

government, are not insured against losses. That
means that despite the risk-reducing diversification
benefits provided by mutual funds, losses can occur,
and it is possible that you could even lose your entire
investment.

 Trading Limitations:

Although mutual funds are highly liquid in

general, most mutual funds cannot be bought or sold in
the middle of the trading day. You can only buy and sell
them at the end of the day, after they've calculated the
current value of their holdings.

 Poor Performance:

Returns on a mutual fund are by no

means guaranteed. In fact, on average, around 75% of
all mutual funds fail to beat the major market indexes,
and a growing number of critics now question whether
or not professional money managers have better stock-
picking capabilities than the average investor.

 Fees and Expenses:

37
 Most mutual funds charge
management and operating fees that pay for the fund's
management expenses (usually around 1.0% to 1.5%
per year). In addition, some mutual funds charge high
sales commissions, fees, and redemption fees. And
some funds buy and trade shares so often that the
transaction costs add up significantly. Some of these
expenses are charged on an ongoing basis, unlike
stock investments, for which a commission is paid only
when you buy and sell.

TYPES OF INSURANCE PLANS:

TERM INSURANCE POLICY

A term insurance policy is a pure risk cover for a

specified period of time. What this means is that the
sum assured is payable only if the policyholder dies
within the policy term. For instance, if a person buys Rs
2 lakh policy for 15-years, his family is entitled to the
money if he dies within that 15-year period.
What if he survives the 15-year period? Well, then he is
not entitled to any payment; the insurance company
keeps the entire premium paid during the 15-year
period.
So, there is no element of savings or investment in
such a policy. It is a 100 per cent risk cover. It simply
means that a person pays a certain premium to protect
his family against his sudden death. He forfeits the
amount if he outlives the period of the policy. This
explains why the Term Insurance Policy comes at the
lowest cost.

38
WHOLE LIFE POLICY

As the name suggests, a Whole Life Policy is an

insurance cover against death, irrespective of when it
happens.
Under this plan, the policyholder pays regular
premiums until his death, following which the money is
handed over to his family.
This policy, however, fails to address the additional
needs of the insured during his post-retirement years. It
doesn't take into account a person's increasing needs
either. While the insured buys the policy at a young
age, his requirements increase over time. By the time
he dies, the value of the sum assured is too low to
meet his family's needs. As a result of these
drawbacks, insurance firms now offer either a modified
Whole Life Policy or combine in with another type of
policy.

ENDOWMENT POLICY

Combining risk cover with financial savings, an

endowment policy is the most popular policies in the
world of life insurance.
In an Endowment Policy, the sum assured is payable
even if the insured survives the policy term.
If the insured dies during the tenure of the policy, the
insurance firm has to pay the sum assured just as any
other pure risk cover.
A pure endowment policy is also a form of financial
saving, whereby if the person covered remains alive

39
beyond the tenure of the policy, he gets back the sum
assured with some other investment benefits.
In addition to the basic policy, insurers offer various
benefits such as double endowment and marriage/
education endowment plans. The cost of such a policy
is slightly higher but worth its value.

MONEY BACK POLICY

These policies are structured to provide sums required

as anticipated expenses (marriage, education, etc) over
a stipulated period of time. With inflation becoming a
big issue, companies have realized that sometimes the
money value of the policy is eroded. That is why with-
profit policies are also being introduced to offset some
of the losses incurred on account of inflation.

A portion of the sum assured is payable at regular

intervals. On survival the remainder of the sum assured
is payable. In case of death, the full sum assured is
payable to the insured. The premium is payable for a
particular period of time.

ANNUITIES AND PENSION

In an annuity, the insurer agrees to pay the insured a
stipulated sum of money periodically. The purpose of
an annuity is to protect against risk as well as provide
money in the form of pension at regular intervals.

40
Over the years, insurers have added various features
to basic insurance policies in order to address specific
needs of a cross section of people.
ULIPs:
ULIP is an acronym for Unit Linked Insurance Plan.
ULIPs are distinct from the more familiar ‘with profits’
policies sold for decades by the Life Insurance
Corporation. ‘With profits’ policies are called so
because investment gains (profits) are distributed to
policyholders in the form of a bonus announced every
year. ULIPs also serve the same function of providing
insurance protection against death and provision of
long-term savings, but they are structured differently. In
‘with profits’ policies, the insurance company credits the
premium to a common pool called the ‘life fund’ after
setting aside funds for the risk premium on life
insurance and management expenses. Every year, the
insurer calculates how much has to be paid to settle
death and maturity claims. The surplus in the life fund
left after meeting these liabilities is credited to
policyholders’ accounts in the form of a bonus. In a
ULIP too, the insurer deducts charges towards life
insurance (mortality charges), administration charges
and fund management charges. The rest of the
premium is used to invest in a fund that invests money
in stocks or bonds. They number of units represents
the policyholder’s share in the fund. The value of the
unit is determined by the total value of all the
investments made by the fund divided by the number of
units. If the insurance company offers a range of funds,
the insured can direct the company to invest in the fund

41
of his choice. Insurers usually offer three choices—an
equity (growth) fund, balanced fund and a fund, which
invests in bonds. In both ‘with profits’ policies as well as
unit-linked policies, a large part of the first year
premium goes towards paying the agents’
commissions.

DATA INTERPRETATION AND ANALYSIS

1.Do you have any knowledge about stock market?

a. Yes b. No

RESULT
YES 17
NO 83

42
From this question I came to know that only a small
percentage of people know about stock broking.
Most people think that by investing in share market
they will lose money.They want safe investment.

2.What do you know about stock market or share

market?
a. High risk, High return b. Low
risk, Low return
c. High return, low risk d. High
risk, Low return

FACTORS RESULT IN %
High risk, High return 63
Low risk, Low return 11
High return, low risk 15
High risk, Low return 11

43
 Analysis:-
From this we came to know that people have
different opinion about stock broking. In this
we found that many people think that by
investing in share they will get high rerun.
Some People think that by investing in share
they can have less risk as well as less return.

3. Have you invested in share market?

a. Yes b. No

Survey result

44
 INVESTMENT RESULT
YES 22
NO 78

Analysis:-
we have asked this question because by
this we can know that how many people are really
investing in share . In this we found that few people are
investing in share. it is little higher than because some
of them invest in share market without having any
knowledge about share market.

4. By which mode would you like to invest in share

market?
a. Online share trading
b. Offline share trading

Survey result

45
 OPTIONS RESULT
Online 68
offline 32

Analysis:- From this question we came to

know that most people like to invest in share
market by online mode. they don’t want to
take any risk in monetary term. some people
don’t want invest by this way because they
are not aware about online trading.
Q5. What percentage of your income do you

invest?

Below 10% 28
10%-30% 55
30%-50% 8
Above 50% 5
percentage of income invested

60

50

40

30 Series1
20

10

0
Below 10% 10%-30% 30%-50% Above 50%

46
Analysis: About 60% of people said that they invest

between 10%-60% of their total income in some or

other types of financial tools. A major chunk of people

belonging to this segment are young, large disposable

income and have a little knowledge about investment

and are willing to take risk.

Q6. What features/attributes do you except from a

bank While opening online trading account

Quick Service 45%

Proper Information 25%
Working Hour 15%
Less Formalities 10%
Variety Of Products 5%

47
Analysis: - When a customer visits any bank the first

and foremost thing he looks; how quickly he is served

and how his problem is entertained by the bank

employee that is why in this bar most of customer

prefer quick service. Second thing customer wishes to

have proper information regarding their queries. One

thing in this bar also really significant is, factors like,

less formalities of document while opening an account,

variety of product do not make a big impact on

customer behavior for opening an account in any bank

if its service is efficient. So service sector like banking

preference should be given to make a prompt and

customer friendly service channel. For this focus must

be given to make a prompt and customer-friendly

service channel. For this focus must be given to make

well informed and pro-active employee along with work

should be executed technologically rather than

manually.

Q7. Which factor among the following influenced

you to open on line trading account in HDFC

securities?

RESULT IN %
Friends And Relatives 52
Bank Employee 38

48
Prospectus 3
Advetisement 7

60

50
40 Friends And Relatives
30 Bank Employee
Prospectus
20
Advetisement
10

0
RESULT IN%

49
Analysis: - As it is said a satisfied a customer is the

best medium for an advertisement since in this

bar friends and relatives have play a key role in

opening the accounts for others, which implies

that securities real customers are satisfy enough

with the facilities available on the products and

the services enjoyed by them .HDFC securities

employees more or less has also been good

performer in their respective domain. Friends and

relatives has been a key factor in generating the

awareness about securities product as well as

facilities that is made to available on them in the

people’s mind .HDFC Securities employees have

also been informed and have the ability to convert

potential customers according to ability.

8. Your remark on Online Trading Account services

of HDFC securities?

RESULT IN %
Excellent 32
Good 40
Average 24
Poor 4

50
 4%

24% 40%

32%

Good Excellent Average Poor

Analysis: - As this bar is showing at what level people

are satisfied with online trading account, with its unique

facility, features and ability to serve all the needs of

customers because by and large it can be said 75%

people of this bar are saying good to trading account,

this implies that this product has been a leading

product and is still an attractive product of the HDFC

securities. Reason for this could be different type of

facilities associated with this product, which are

rendering true value to the customer and marketing

people are also very much devoted to give the best

from this part. Effort must be given to know why they

are people who are still saying average and poor about

saving account and what are factors that are going

wrong with that segment of people.

51
Q9. In comparison to other securities firms how

would you rate HDFC Securities?

50%
40%
30%
20% 44%
10% 24% 20%
8% 4%
0%

Good Average Excellent Can't Say Poor

Analysis: - Rating of any bank depends on its overall

performance in the eyes of the people. This bar is

vividly showing that the performance of HDFC Bank

has been good because in such a short span of its

existence in this city with strong competition from major

public sector bank like SBI and other private banks.

Reason for this could be, it has occupied a different

position in the people mind with its customer friendly

products and to serve them an efficient and prompt

banking system. According to our survey we found that

many of the customers think that the services provided

by HDFC Securities are good. There are some

customers who are confused about rating this

52
Because they are not aware of all facilities and services

provided by an brokerage firm. Very few think that the

services are not up to the mark.

Age Group

Age Group

50%
40%
30%
20% 44%
10% 28% 16%
0% 12%
25 to 40 40 to 55 less than 25 above 55
year year year year

25 to 40 year 40 to 55 year less than 25 year above 55 year

Implication: - After looking this bar, it can be said the

middle-aged group are the main customer of the bank

as they have occupied almost 75% of this graph. It

means they have more access on the all features,

which are really useful for them. It can be said Saving

Account a leading product of Kotak Mahindra Bank has

successful to attract a major Chunk of people as far as

age factor is concerned. But the young and old age

group people have been less attractive on this leading

product of Kotak Mahindra Bank, which is fast area of

concern. So collectively it can be said a huge

potentiality, is still available for this product.

53
OCCUPATION

Occupation

50%
40%
30%
20% 44%
10% 28%
20%
0% 8%
Service Business Others Student

Service Business Others Student

ANNUAL INCOME

Annual Income

0% 5%
26%
33%

36%

1 to 2 lakh 2 to 3 lakh 3 to 4 lakh more than 4 lakhs

OBSERVATIONS

SWOT ANALYSIS

54
SWOT Analysis is a best way to view the organization’s

strategic situations. It helps to form a basis for deciding

on the extent to which a change in the strategy is

necessary.

Strengths:

 One of the leading Securities firm.

 HDFC securities are fully customer

centric firms.

 Strong research backed advisory

service.

 Offers a wide range of products and

services to its corporate and retail customers.

Weaknesses:

 Limited number of branches.

 Average promotional activities.

Opportunities:

 The signs of Indian economy reviving

have created a lot of opportunities for the company.

 Foreign banks, long used to a special

dispensation in term of capital calculations, now

have to play by tough new rules in India. The

problems for foreign banks may turn out to be

opportunity to private banks in India and they would

55
 stand to be the largest gainers/from restructuring

and exit of foreign banks.

Threats:

 Increased competition from foreign banks

which have begun to foray into financial services

segment will pose a threat to the company’s market

share and hence its bottom lines.

FINDINGS

1. Survey shows that some people even after of being

aware of financial products don’t want to invest.
Reason behind this they have given that their money
will be blocked. Money is something that everyone
wants to keep it with them.

2. Even after having availability of so many financial

products people most likely prefer to invest in
insurance. Almost everyone have invested in
insurance. Second most popular product is mutual fund
because in it there is flexibility of withdrawal of money
and also investment is for short period of time. For
share trading are people are even less interested
because of it’s high volatility even after having more
awareness.

56
3. Most of the customers of HDFC securities have said

that they haven’t advised by the HDFC about various

investment schemes.

4. Factor which highly influences investment in any

financial product is return i.e. how much they will get
after a particular period of time. Second most important
factor is risk i.e. what is the guarantee of getting return.
Next is tax benefits, it is preferred because many
people invests in any financial instrument for saving
taxes. Some people preferred liquidity i.e. whether they
can withdraw money when they need it or not, on this
basis they invests.
5. In recruitment of advisor we found that people don’t
want to work on commission basis. They require some
basic payment. Also we faced problem to join them as
a advisor because most of the people don’t have PAN
card. Without PAN they can’t become advisor.

6. People mostly like to invest in low risk instruments

like insurance and mutual fund because at least they
give some returns.

7. Most of the non-existing customers were not getting

the following facilities from their securities firms, which

they want: Free value added services, fast processing.

8. The promotional activity of HDFC securities is quite

average.

LIMITATIONS

57
 Limitations of this project are:-
1. It is very hard to convince people for any particular
financial product. Whatever mentality they have for
any product it changes after a long time.
2. Sample size studied here is too small in comparison
to the market and its potential investors. Thus the
number of respondents studied here is too small to
get a accurate result and therefore the conclusions
drawn are not applicable to the market in specific.
3. Time, mentality of investor and the fluctuations in
the stock market adds to the market volatility.
4. It is difficult to get time from people for explaining
the products.
5. Answers given by the customers and bank

personnel might be biased, which may have my

project.

RECOMMENDATIONS/ SUGGESTIONS

1. HDFC should promote their securities through

advertisements or through other channels. So that

everybody should get aware of this securities firm.

2. Financial firms should understand the need of

customer then only right financial product should be
suggested to them.

3. Financial advisors should create faith in customers

for different financial products and give the feeling of
“WE CARE FOR YOU”.

58
4. Mobile banking provided by the HDFC is not working

properly, so HDFC should take this into consideration

and try to eradicate such problems.

4. Today many people don’t know about mutual fund

and share trading so awareness program like small
presentations should be given on public places like in
movie theatre, in waiting queue’s etc.

6. A HDFC employee doesn’t have proper product

knowledge due to which sometimes customer gets

confused. So HDFC should provide product training

sessions to their employees.

7. HDFC Securities should take their customers

feedback, so that they can assess themselves and

able to give a good service to customer.

8. Equal importance should be given to retain the

customers as it given at the time of opening D-mat

accounts.

9. The company needs to create awareness, as

people are unaware about the types of financial

instruments available in the market.

CONCLUSION
It is great experience to work with financial firm like
“HDFC SECURITIES” where I got the knowledge about
different criteria to recruit advisor. I knew about

59
different financial product. During the market activity I
get to know what the people’s response towards
different financial instruments is.
We found that insurance is most popular instrument
among people. Even today traditional insurance is
more preferred than ULIP.
Mutual fund is also preferred by those people who are
of older age and even by younger people due to it’s
short term and tax saving benefits.
Insurance is mostly preferred by lower and middle class
people
Share trading is done by only by those people who are
having great interest in it and having risk taking ability.
With utmost regards I would like to thank my faculty
guide Mr M.K.Gandhi & the company guide Ms.
Supriya and Mr Amol Devkar for their guidance.
We would like to say that the project has helped me a
lot in enhancing my knowledge regarding financial
products and Financial Market.

BIBLIOGRAPHY

Bibliography includes references, books, magazines,

web sites and newspapers that are used during any

research. I used following bibliography during my

research project.

Books

• Kothari, C.R., Research Methodology, New

Delhi, New Age International Ltd.

60
• Kotler Philip, Marketing Management, 2003

Edition, “New Delhi”, prentice hall of India.

• Schiff man, L.G, kanuk, L.L,”Consumer

behavior”, Pearson education, year 2003-04,

seventh edition.

WEBLIOGRAPHY

INTERNET

• www.HDFC securities.com

• www.yahoosearch.in

• www.google.com

• www.rbi.in

• www.wikipedia.org

• www.indiabulls.com

• www.indiainfoline.com

• www.ilfsndia.com

• www.angelbroking.com

• www.sharekhan.com

61
QUESTIONNAIRE

Demographics

1. NAME:
______________________________________
_______

2. AGE:
3. SEX: M / F

4. MARTIAL

5. PROFESSION:

ANNUAL INCOME (Rs.):

Up to 1.5 lakh 1.5 to 3 lakh

3 to 5 lakh
Above 5 lakh

6. CONTACT.NO:

7. EMAIL.ID :
______________________________________
_____

1. Do you have any knowledge about stock market?

a. Yes
b. No

62
2. What do you know about stock market or share
market?
a. High risk, High return b. Low
risk, Low return
c. High return, low risk d. High
risk, Low return
3. Have you invested in share market?
a. Yes b. No
4. By which mode would you like to invest in share
market?
a. Online share trading b. Offline share
trading
5. What percentage of your income do you invest?

a. Below 10% b. 10%-30%

c. 30%-50% d. Above 50%

6. What features/attributes do you except from a

bank While opening online trading account.

a. Quick Service b. Proper

Information

c. Working Hour d. Less Foralities

e. Variety Of Products

7. Which factor among the following influenced you

to open on line trading account in HDFC

securities?

a. Friends And Relatives b. Bank Employee

c. Prospectus d. Advertisement

63
8. Your remark on Online Trading Account services

of HDFC securities?

a. Excellent b. Good
c. Average d.Poor

9. In comparison to other securities firms how

would you rate HDFC Securities?

a. Excellent b.
Average
c. Good d. Poor

---------------------

64