2011

EDELWEISS BROKING LTD.

SUSHIL KUMAR SAHU PGDM (2010-12) Marketing INDIRA INSTITUTE OF MANAGEMENT PUNE

Name - SUSHIL KUMAR SAHU

Division B

Roll NO. 0112

Course PGDM ( 2010-12)

Major Marketing

Email ID Sushil.sahu2688@gmail.com

Contact No. 8605975767

TABLE OF CONTENTS
TOPIC TITLE OBJECTIVES QUESTIONNAIRE RESEARCH METHODOLOGY INDUSTRY PROFILE COMPANY PROFILE SWOT ANALYSIS COMPETITION MAJOR STRATEGIES ROLE AND GOAL IN EDELWEISS USE OF IT AS PRODUCTIVITY ENHANCER PERFORMANCE MANAGEMENT SYSTEM 4-8 9-11 12-13 14-16 17 18-19 20-21 PAGE NO.

TITLE

A study on the investment pattern of Middles class investors in Equity market.

OBJECTIVES A Consumer Behaviour research of different customers on the Products offered by Edelweiss. To know the trend of the financial performance of the Edelweiss.

A detailed study of the functions of a financial services company and the stock market. To analyze the pattern of investments of Edelweiss clients and the factors influencing their decision.

RESEARCH METHODOLOGY

RESEARCH DESIGN
The research design constitutes the blueprint for the collection, measurement and analysis of the data. Basically research design is the plan and structure of investigation, so conceived as to obtain answers to the research questions. The kind of research design is used for the completion of my project study is a combination of exploratory and descriptive. Exploratory study- it is a kind of study in which the researcher is not clear with the idea of problem. Exploratory study helps the researcher to develop the concepts more clearly, establish priorities, develop operational definitions, and improve the final research design.

SAMPLING PROCEDURE
The basic idea of sampling is that by selecting some of the elements in a population, we may draw conclusions about the entire population. It is an essential part of research process. Convenience sampling- The selection of units from the population based on their easy availability and accessibility to the researcher. Convenience sampling is best used in surveys dealing with an exploratory purpose for generating ideas and hypothesis. In my study we have also used this kind of sampling because majorly the respondents were walking customers.

SAMPLE SIZE :
The sample size taken for the research study is 150 (respondents ) .

DATA COLLECTION:
Data collection for the research and to fulfill the objective will be done through : 5

Primary sources Secondary sources

Under primary sources it includes questionnaire which will be filled by the investors as well as the financial advisors. The respondents of my questionnaire will restrict to only residents of PUNE. The questionnaire compromises of the close ended. The sample size taken for this is 150 respondents who are investors or have any interest in Stock market and the sampling done is the convenient sampling. The reason for preparing a questionnaire is that after analysis I will be able to present the data about exactly what kind of investment does an investor prefers to do. The data from secondary sources will be collected through various published and unpublished sources DATA ANALYSIS AND DATA INTERPRETATION Data interpretation will be done through statistical tools like Bar graphs Pie charts Tables

In the hypothesis testing, we use two kinds of hypothesis first the null hypothesis and the other one is the alternative hypothesis. NULL HYPOTHESIS (Ho): it is the statement that that says that there exists no difference between the parameter (a measure taken by a census of the population and prior measurement of a sample of the population) and the statistic being compared to it (a measure from a recently drawn sample of the population). ALTERNATIVE HYPOTHESIS (Ha): it is the statement that says that there exists a difference between the parameter (a measure taken by a census of the population and prior measurement of a sample of the population) and the statistic being 6

compared to it (a measure from a recently drawn sample of the population). A alternative hypothesis is the logical opposite of the null hypothesis.

INDUSTRY PROFILE

Inception The roots of a stock market in India began in the1860s during the American Civil War that led to a sudden surge in the demand for cotton from India resulting in setting up of a number of joint stock companies that issued securities to raise finance. Bubble burst The early stock market saw a boom till 1865,and then in July 1865, what was then used to be called the share mania ended with burst of the stock market bubble. In the aftermath of the crash, banks, on whose building steps share brokers used to gather to seek stock tips and share news, disallowed them to gather there, thus forcing them to find a place of their own, which later turned into the Dalal Street. A group of about 300 brokers formed the stock exchange in Jul 1875,which led to the formation of a trust in 1887 known as the Native Share and Stock Brokers Association It was in 1875 that the Indian Share Market f i r s t s t a r t e d functioning. The first share trading association in India was known as the Native Share and Stock Broker's Association. Though many other exchanges exist, BSE and the National Stock Exchange of India account for most of the trading in shares in India .Thus the Main components of Indian Share Market are

A) Bombay Stock Exchange (BSE): The Bombay Stock Exchange (BSE) (Hindi: Bombay hare Bzar) is the oldest stock exchange in Asia and largest number of listed companies in the world, with 4990 listed as of August 2010.It is located at Dalal Street, Mumbai, India. On Aug, 2010, the equity market capitalization of the companies listed on the BSE was US$1.39 trillion, making it the 4th largest stock exchange in Asia and the 11th largest in the world. With over 4,990 Indian companies listed & over 7700 scripts on the stock exchange, it has a significant trading volume. The BSE SENSEX (SENSITIVE INDEX), also called the "BSE30", is a widely used market index in India and Asia. The Bombay Stock Exchange is known to be the oldest stock exchange in the entire Asian region. It started functioning in 1875 with the name 'The Native Share and Stock Broker's Association'. Under the Securities Contracts (Regulation) Act, 1956, the association got its recognition as a stock exchange in 1956. Till the decade of eighties, there was no measure or scale that could precisely measure the various ups and downs in the Indian stock market. BSE, in 1986, came out with a Stock Index-SENSEX- that subsequently became the barometer of the Indian stock market.. It comprised 100 stocks listed at five major stock exchanges in India -Mumbai, Calcutta, Delhi, Ahmadabad and Madras. When it started, it was just an association of persons but with the recognition it got transferred to a corporate and demutualised entity. 8

Now it does Trading items in Bombay Stock Exchange Equity or Shares Derivatives (Futures and Options) Debt I Debt Instruments The index calculation is based on the 'Free-float Market Capitalization' methodology. Leading bourses like the Dow-Jones a l s o f o l l o w t h i s methodology.

B) National Stock Exchange (NSE):

The National Stock Exchange (NSE) is a stock exchange located at Mumbai, India. It is the largest stock exchange in India in terms of d a i l y t u r n o v e r a n d number of trades, for both equities and derivative trading.NSE has a market capitalization of around 6 , 3 9 3 , 4 1 8 c r o r e (US$1,438.52 billion) in August 2010 .National S t o c k E x c h a n g e ( N S E ) i s considered to be the leader in the stock exchange scenario in terms of the total volume traded. The National Stock Exchange received the recognition of a stock exchange in July 1993 under Securities Contracts (Regulation) Act, 1956. NSE is the third largest Stock Exchange in the world in terms of the number of trades in equities. It is the second fastest growing stock exchange in the world with a recorded growth of 16.6% The products that are traded in the National Stock Exchange are:Equity or Share Futures (both index and stock) Options (Call and Put) Wholesale Debt Market Retail Debt Market Currency futures MUTUAL FUND STOCKS LENDING & BORROWING

NSE has a fully automated screen based trading system which is known as the NEAT system. The transactions are carried on with speed, efficiency, and are all transparent. The risk management system of the National Stock Exchange is world class and can be considered as the benchmark for other bourses. The leading index of NSE is known as Nifty 50 or just 9

Nifty. It comprises of 50 diversified benchmark Indian company scrips and is constructed on the basis of weighted average market capitalization method.

Beginning of a new phase - A new phase in the Indian stock markets began in the 1970s, with the introduction of Foreign Exchange Regulation Act (FERA) that led to divestment of foreign equity by the multinational companies, which created a surge in retail investing

Setting up of SEBI: Regulatory Authority of Indian Share Market: The regulatory body for the Indian capital markets was the SEBI (Securities and Exchange Board of India). The capital markets in India experienced turbulence after which the SEBI came into prominence. SEBI or Securities and Exchange Board of India is the market watchdog and has the responsibility of protecting the investors' interests, develops regulatory norms and helps in the development of the securities market in India. The Securities and Exchange Board of India (frequently abbreviated SEBI) is the regulator for the securities market in India. It was formed officially by the Government of India in 1992 with SEBI Act 1992 being passed by the Indian Parliament. Chaired by C B Bhave, SEBI is headquartered in the popular business district of Bandra-Kurla complex in Mumbai, and has Northern, Eastern, Southern and Western regional offices in New Delhi, Kolkata, Chennai and Ahmedabad. The regulatory body for the Indian capital markets was theSEBI (Securities and Exchange Board of India). The capital markets in India experienced turbulence after which the SEBI came into prominence.

Functions and responsibilities of SEBI: SEBI has to be responsive to the needs of three groups, which constitute the market: The issuers of securities The investors & The market intermediaries.

SEBI has three functions rolled into one body quasi-legislative, quasi-judicial and quasi-executive. It drafts regulations in its legislative capacity, it conducts investigation and enforcement action in its executive function and it passes rulings and orders in its judicial capacity.

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Why to invest in Indian share market? An investor does not require a lot of money to start investing in India share market unlike buying property and paying off a monthly mortgage. Time of trading involved spans from small to big. One can trade for a short period of time or even a lengthy span. It helps you to see 'fast' cash if the market is in robust mood and helps in fast liquidation. Type of Indian Markets: Basically there are two types of markets. 1. Primary market 2. Secondary market Primary Market: A primary market is a place where companies, government and other corporate bodies sell new shares and other financial products which are also called as financial products. In primary market trading is not allowed. Like any newly listed company sells IPO (initial public offer) then it happens in primary market or whenever any already exiting company goes public then at that time it issues an IPO in primary market. Secondary market: A market place where actual share trading (buying and selling) takes place is called secondary market. Majority of share trading in India happens in top two exchanges called NSE and BSE.

Types of Trading and Investments in Indian Share Market: Basically trading and investing are two different methods of earning money in share market. Types of Trading: Trading is done on stock price for a day or for couple of days. Trader is not worried about company performance; he is onlyworried to book profits whenever the share price rises. Basically there are two types of trading methods 11

1. Online Trading 2. Day trading and 3. Swing trading. 4. Position Trading Types of Investment: Basically there are three types of investment methods. i. ii. iii. Short term investment Midterm investment Long term investment

i)

Short term investment:

Investment done from couple of weeks to couple of months is called short term investment. It is done based on breaking news, or based on charts of technical analysis. ii) Medium term Investment:

Investments done from couple of months to couple of years iscalled mid tem investment. It is done based on analysis of quarterly financial results or based on fundamental analysis. iii) Long term investment:

Investment done from one year to couple of years like 3years, 5 years, 10 years etc. Long term investment is basically done after thoroughly analyzing the fundamentals of the company and its future growth prospects. And also the wise investor invests in companies whose current share prices are undervalued but its future growth is huge. Generally long term investor is worry free from daily markets up and down and share prices volatility.

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COMPANY PROFILE
Edelweiss Capital is one of leading financial services company. Incorporated in 1995, the company provides wide range of services to corporations, institutional investors and high networth individuals. It has Revenue of 54.4548 ( USD in Millions ) and Market Cap of 28877.809152 ( Rs. in Millions ) Net Profit - Rs. 342.04 Million ( year ending Mar 2010) The company has a presence in investment banking, institutional equities, private client broking, asset management, wealth management, insurance broking, wholesale financing and mutual funds. It also provides including private placement of equity, capital raising services in public markets, mezzanine and convertible debt, mergers and acquisition, and restructuring advisory services. The company also offers equity broking and research services, as well as marketing of equity related products, including IPOs/FCCBs to domestic and foreign institutional investors. Currently, it employs over 1700 employees and operates from 46 offices spread across in 19 cities. It has a total turnover of Rs.2500 crores with a whopping Business Areas Investment Banking- The company provides full range of services and transaction expertise, including private placements of equity, capital raising services in public markets, mezzanine and convertible debt, mergers and acquisition and restructuring advisory services. These services are offered to corporations, entrepreneurs and investors. Institutional Equities- The companys subsidiary Edelweiss Securities is engaged in providing equity broking and research services, marketing of equity related products, including IPOs/FCCBs, to domestic and foreign institutional investors. It offers its services to clients who are leading domestic and international institutional investors, including pension funds, hedge funds, mutual funds, insurance companies and banks. Asset Management- Edelweiss Capital offers a range of investment products and advisory services in area of risk return spectrum to individual and institutional investors. Wealth Management- It offers a range of services in area of portfolio management services, direct equities, structured products, mutual funds, insurance, and real estate funds IPOs and derivatives. Private client brokerage- This business division provides its products and services to High Net worth Individuals and corporate clients.

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Insurance Brokerage- Edelweiss Insurance Brokers, a subsidiary of ECL, is engaged in insurance brokering. Wholesale Financing- In order to caters liquidity requirements of clients, it offers wide range products and services to individuals and corporates.

Business Principles
The core inspiring thought of ideas creating wealth and values protecting it is translated into an approach that is led by intrapreneurship and creativity and protected by intellectual rigour, research and analysis. Ideas create, values protect is what Edelweiss believes in. It is a Thinking Organization. It constantly brings thought to everything the firm does. The vision is to be Fair to the clients, the employees and all stake holders. The policies in spirit and in letter ensure transparency and equal opportunity for all. It promises to go beyond the normal goals of attracting, recruiting, retaining and rewarding fine talent: The company ensures that every individual in Edelweiss has an opportunity to achieve their fullest potential. Clients are treated as partners and show them the same respect and consideration that they would toward their own internal team members. It focuses on the Long Term. The company gives importance to the Growth of clients, employees and shareholders. The firm genuinely respects Risk. The business is going to be a constant challenge of balancing risk and reward.

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APPROACHES
Client Focus Edelweiss emphasizes on building long-term relationships with the clients. It works closely with the clients to equip with the ability to address large, fast-growing market opportunities.

Execution Orientation The Company focuses obsessively on delivering high quality execution through the experienced team of professionals. Each team is led by senior personnel and is highly research and ideas driven. strong emphasis is put on confidentiality and integrity in a sensitive business environment. Culture Edelweiss fosters a culture that is entrepreneurial and results-driven and that emphasizes teamwork and intellectual rigour.

Professional Integrity It gives significant importance on confidentiality, honesty and integrity in business dealings. Firm expects people to maintain high ethical standards, both in their professional and personal lives. Research Driven All its businesses are built on a research and analytics foundation. The understanding of underlying market trends and strong analytical expertise has resulted in a demonstrated ability to identify emerging trends and themes early.

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KEY EXECUTIVES
Senior Management Team

Himanshu Kaji GROUP COO Venkat Ramaswamy EXECUTIVE DIRECTOR Naresh Kothari President & Head Equities Capital Market Rashesh Shah CHAIRMAN & CEO Rujan Panjwani President & Head,Treasury Deepak Mittal CEO,Edelweiss Tokio Life Insurance Co.Ltd.

Vikas Khemani Institutional Equities

Ravi Bubna Head, wholesale Financing

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SWOT ANALYSIS
STRENGTHS OF THE COMPANY Has an integrated business model, which specializes in providing a wide range of financial products and services such as investment banking, institutional equities, wealth management, and wholesale finance. Is well positioned to leverage the growing financial sector in India and become a significant market player, especially in areas like investment banking, institutional equities etc. Has a strong research platform with research products, such as fundamental and alternative research, catering to institutions and HNWIs and retails. Backed by significant collective experts servicing and advising the clients according to their risk appetite. Well-trained to understand the clients needs and provide them innovative products in a customized manner. Strong Risk management system to monitor the risk exposure to customers as well as to the firm Strong Brand presence with impressive record of high growth and profitability. Active enough to grab new businesses and ideas.

WEAKNESS OF THE COMPANY

No presence in the rural and semi-urban segment. Lack in making follow-ups. Lack of loyal corporate agents. Lack of promotional activities.

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 OPPORTUNITIES BEFORE THE COMPANY

Strong economic growth, increased geographic penetration, growth of SMEs and the increasing need for capital among Indian corporations are expected to continue to drive Indias financial services industry.

The Company is already well established in domains such as investment banking. Moreover, it plans to invest a large part of its IPO in prepaying of loans, enhance margins with stock exchanges and establish new offices.

Huge untapped retail segment - the Company has a huge opportunity before it as it has a vast untapped retail segment. Increasing affluent class- The rise of the affluent class will aid the growth of the company The Indian financial sector carries immense growth opportunities, be it investment banking, wealth management, insurance broking or any other domain

The focus on diversity has already reduced the risk of client and product concentration. With a continuous rise in number of HNIs, and the expansion of capital markets, domains such as investment banking, PMS are likely to experience outstanding growth

CHALLENGES BEFORE THE COMPANY

More people have sold the shares in the Indian share market than they bought in the recent weeks. This has added to the fall of sensex to lower points. Foreign investors have pulled out from stock markets leading to heavy losses in stocks and mutual funds Because of such uncertainty many people have started saving money in banks rather than investing

Business Volatility- The business in which the company is in is very volatile and keeps changing with the market situation. So to keep a good pace of growth is the challenge that lies ahead

Competition- The competition is fierce among different market players and 19

standing in this situation is a challenge Risk management- The business is prone to a high risk and minimizing risk is the need of the time People- The company should maintain the good working force that it has with it at present and improve it to gain competitive advantage

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MAJOR COMPETITORS
Company Last Price
176.00 India Bulls

Market Cap (Rs.Cr.)

5.474.07

Sales Turnover
1,420.81

Net Profit
264.16

Total Assets
11,000.08

519.30 SKS MicroFinance 38.10 Edelweiss Capital India Infoline 73.30

3,755.78

3,652.70

2,861.20

245.53

34.21

2,763.54

2,138.82

698.041

52.02

1,605.86

Delta Corp.

96.20

1,941.39

54.10

13.57

443.06

133.80 Motilal Oswal Finance 157.40 Network 18

1,932.33

51.13

42.38

532.80

1,871.42

32.96

-44.54

1,596.23

Future Capital

168.40

1,091.21

55.29

17.32

1,196.17

23.95 Geojit BNP

547.02

234.75

48.75

319.05

811.25 Nalwa Sons Inv

416.67

12.02

9.11

280.00

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Market Cap
2% 2% 5% 8% 25% India Bulls SKS MicroFinance Edelweiss Cap India Infoline 9% Delta Corp Motilal Oswal 9% 10% 13% 17% Network 18 Future capital Geojit BNP Nalwa Sons Inv

1800 1600 1400 1200 1000 800 600 400 200 0 -200 Net Profit Sales Turnover

Figure 1 Sales and Net Profit Comparisons

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COMPETITIVE STRATEGIES
Edelweiss capital is the only brokerage on the Street with a quant desk that provides a wide product range, servicing all investor categories. The firms innovative mindset, unparalleled research, agile sales teams, and intensive execution systems have enabled it to relentlessly service to the clients in newer and different ways.

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The Company adopts majorly Direst selling and telemarketing strategy when it comes to sales. Appointments are fixed over phone and if the client is found out to be a prospective customer. The sales team approaches with an appointment and tries to understand the customer needs and keeping that in mind services are created to suit his/her individual needs.

SALES PROCESS
Identify Potential Customers

Cold calling and Getting an appointment fixed Understanding the needs of the client Advising a beneficial product that meets client's priorities

Conduct after Sales service

Thus, helping the company to create healthy customer relationships with clients fora long term.

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Emphasize entrepreneurial spirit and scalable business models which seek to revolutionize business as much as the past records. This ideology helps to offer solutions not only for proven companies but also young risk takers who are In their early stage of their growth. There is also active participation in the growth of emerging companies in diverse sectors over the entire growth cycle. .

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MY ROLE IN EDELWEISS
Since I am a Summer intern for two months, I will be working for client servicing and ESOPs (Employee Stock Ownership Plans) basically. My task would be to help edelweiss broking Ltd. In finding prospective customers and then fixing appointment to make them understand about the product and convince them and show them the need of the finance products in their life. I would help the firm in generating sales and help the company in building customer relationships. In this way it would help me to indulge myself in the corporate world and develop management skills and personality skills which would be beneficial in grooming me according to the industry norms. It would also improve my negotiation and problem solving skills. I would get a better insight of the Banking and Financial sector thus planning a Future Career in this field. Since I have already invested in stocks and mutual Funds, I have knowledge about how the products work and its significance. I would help the company by preparing a report that would analyze at what stage edelweiss currently stands and how it can improve in its operations and efficiency. What new technologies it can use to make things work faster and accuratelyand how it can gain Competitive advantage. Since its presence in rural areas is minimal, I would suggest some recommendations as to how it can penetrate in semi urban and tier-3 cities. Moreover, I would like to be associated with Edelweiss capital, as it is one of the leading Financial services company with a strong brand name.

Since the Goal of the company is to build long term relationships with clients and to tap on the new opportunities coming in its way.I would help it to achieve its aim in servicing its clients in the desired and effective way.

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