Chapter-I

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INTRODUCTION OF COMPANY

The five chartered accountants founded Karvy Consultants Limited in 1982. A group of Hyderabad based practicing Chartered Accountants started Karvy taxation services initially. Later, it forayed in to the register and share transfer activities and subsequently into financial services. All along Karvys strong work ethics and professional background leveraged with information technology enabled it to deliver quality to the individual. A decade of commitments, professional integrity and vision helped Karvy achieve a leadership position in its field when it handled the largest number of issue ever handled in the history of the Indian Stock market in a year. Therefore, Karvy made in roads into a host of capital market services corporate and retail, which proved to be a sound business synergy. Today Karvy has access to million of shareholder, beside companies, banks, financial institution and regulatory agencies. Over the past one and half decade, Karvy has involved as a veritable link between industries, finance and people. In January 1998, Karvy became the first Depository participants in Andhra Pradesh. As ISO: 9002 Company, Karvy ranks among the top player in almost all the fields it operates. Karvy Computershare Limited is Indias largest Registrar and Transfer Agent with a client base of nearly 500 blue chip corporate, managing over 2 crore accounts. Karvy Stock Brokers Limited, member of National Stock Exchange of India and the Bombay Stock Exchange, ranks among the top 5 stock brokers in India. With over 6, 00,000 active accounts, it ranks among the top 5 Depositary Participant in India, registered with NSDL and CDSL. Karvy Comtrade, Member of NCDEX and MCX ranks among the top 3 commodity brokers in the country. Karvy Insurance Brokers is registered as a Broker with IRDA and ranks among the top 5 insurance agent in the country. Registered with AMFI as a corporate Agent, Karvy is also among the top Mutual Fund mobilize with over Rs. 5,000 crores under management. Karvy Realty Services, which started in 2006, has quickly established itself as a broker who adds value, in the realty sector. Karvy Global offers niche off shoring services to clients in the US. Karvy has 575 offices over 375 locations across India and overseas at Dubai and New York. Over 9,000 highly qualified people staff Karvy.

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OBJECTIVE OF STUDY
1. To know the opinion of the consumer regarding Mutual Funds . 2. To know what consumer look for while Mutual Funds . 3. To know the factors responsible for the satisfaction/dissatisfaction of the consumers 4. To know the potential market of the Karvy.

The objective of the study of the project report is simply just to put my experiences which I gained while doing summer training into presentable form which helped me a lot to get practical acquaintance with an organizations environment which will definitely help me in my future for my development.

PERIOD OF STUDY
The period of training is from June 2012 to July 2012.

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METHODOLOGY SAMPLING APROACH

There are basically two approaches to sampling: a. Probability Sampling. b. The sampling for the Customers Survey was selected by random sampling. Random number was generated for selecting the sample. A sample size of the 50 customers survey. c. Description of the coverage. I have covered the local area of Haldwani. The main objective of a research is to find out the truth which is hidden and which has not been discovered. According to advance learners dictionary of current English the definition of research is: A careful investigation or enquiry especially through search for new facts in any branch of knowledge 1. Marketing research: Marketing managers often commission formal marketing studies of specific problems and opportunities. They may request a market survey, a product preference test, or an advertising evaluation. Marketing research is the function which links the consumers, customers and public to the marketer though information- used to identified and define marketing opportunities and problems, generate ad evaluate marketing actions : monitor marketing performance and improve understanding of marketing as a process. 2. Effective marketing research includes four steps, which should be kept in mind to conduct a marketing research in a perfect manner. a. Define the problem and research objective. b. Develop the research plan. c. Collect the information. d. Present the findings.

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Types of research
The customer research was carried out in two phases: a. An exploratory research was carried out to know what customer looks for in financial company and whether customers are satisfied or not with there products. b. The other was a diagnostic study to identify the factors responsible for satisfactions or dissatisfaction of customer.

SOURCES OF DATA
The data needed data this study has been collected from two main sources: 1. Primary sources. 2. Secondary sources. Primary data has been collected through wall structured Tele marketing, campaigning, direct interview method. Secondary data has helped in collecting information regarding history of the company, division of the company etc. of market position of other financial companies TOOLS USED. Whatever we design of research study it is necessary to collect relevant data. Thus it is useful to consider methods of collecting data and the quality of information produced,

a. Questionnaires:
It is the basic methods of collecting data in marketing research. Questionnaires are the basis method of collecting data in marketing research. Questionnaires are distinguished by the facts that asking question to people who have the desired information collects data. When questioning researches collects data ask questions. They keep track of the objects or actions in which they are interested. Sometimes individual makes the observation on the other occasions mechanical devices note and record the desired information. In this study the data was collected by means of questioning since the method of observation is also used for checking the awareness regarding the financial products. The questionnaires were filled by using tested personal interviews.

b. Contact methods:
To get information contacts is necessary it can be either by telephone or by personal contacts. I prefer personal interview method to get the necessary information from the people. The data was collected through personal interview by asking the questions.

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c. Telemarketing:
To get information I also use this method by calling them through telephone in their homes, offices, institutions etc. and made them aware from demate and the financial product.

SCOPE OF THE STUDY

The project report provides a framework of a whole study which took place in time of training in Karvy Stock Broking Ltd. Haldwani. The study of report will enhance ones knowledge and will act as a guide for my further practical experience in any of the management field. This area demands maximum benefits at minimum cost. An investor has to decide in this electronic trading environment where he is sake with his share holding and where we can get best service at minimum cost. So my study is about whether the consumer is satisfied with all these services that he is getting from different depository participant in Haldwani. Consumer satisfaction can be defined as more that expected that is one get more what he is expecting. So an investor finds himself satisfy when he get services at there home and the share market is the most volatile Not Due to short time I was not able cover all area market.

LIMITATION OF THE STUDY

The project report is based on my personal experience and perception. The guidance provided by guide was not quite complete because of lack of time and busy schedule. Data extracted from various statement and sources and error in statement will have subsequent effect on project.

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CHAPTER II

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INDUSTRY PROFILE KARVY GROUP

KARVY GROUP COMPRISES THE FOLLOWING:-

KARVY CONSULTANTS LIMITED:As the flagship company of the Karvy Group, Karvy Consultant Limited has always remained at the helm of organization affairs, pioneering business policies, works ethic and channels of progress. Karvy as a leader in the registry business now transferred this business into a join venture with Computer share Limited of Australia, the worlds largest registrar. Today, we service over 6 lacks customer accounts in this business spread across over 250 cities/towns in India and are ranked amongst the largest Depository Participant in the country, Deal in Register and investment services. We are rated as India's "Most Admired Registrar" for overall excellence in volume management, quality processes and technology driven services. Our services include Initial Public Offers (IPOs) processing, share holder servicing, effecting corporate actions, investor information services and host of technology enabled services to facilitate efficient and effective service delivery.

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KARVY STOCK BROKING LIMITED:They offer trading on a vast platform National Stock Exchange, Bombay Stock Exchange and Hyderabad Stock Exchange. Information is given as a constant feedback to our customers, through daily reports delivered thrice Daily- The Pre- session Report, where market scenario for the day is predicated, the Mid- session Report, times to arrive during lunch break, where the market forecast for the rest of the day is given and the Post- session Report, the final report for the day, where the market and the report itself is reviewed. To add to this repository of information, we publish a monthly magazine Karvy. The Finapolis Which analyzes the latest stock market trends and takes a close look at the various investment options, and product available in the market while a weekly report, called Karvy Bazaar Baatein keeps you more informed on the immediate trends in the stock market. In addition, our specific industry reports give comprehensive information on various industries. Beside this, we also offer special portfolio analysis packages that provide daily technical advice on scrips for successful portfolio management and provide customized advisory services to help you make the right financial moves that are specifically suited to your portfolio. The institutional broking arm of KARVY Stock Broking offers corporate houses and institutions dealing capabilities on India leading stock exchanges (NSE and BSE) in the cash and derivatives segments. This unit has devised a process driven approach to address the needs of institutional investors who have unique and specialized investment needs. The institutional broking services desk is a specialized business unit at KARVY that operates out of Mumbai, the financial capital of India and is staffed with best-ofindustry equity market professionals and highly skilled dealers. KARVY also supports institutional traders through their institutional sales and research teams with information and insightful reports on stocks, sectors and industry verticals. KARVYs institutional broking clientele include some major domestic Mutual Funds, Insurance Companies, Banks and FIIs in India.

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KARVY INVESTORY SERVICES LIMITED:Karvy Investor Services Limited, a SEBI registered Merchant Banker is a 100% subsidiary of Karvy Consultants Limited and is among the top 10 merchant Bankers in India today. The parent Company i.e. Karvy Consultants Limited was founded by a group of professionals in 1982 and today it has evolved as integrated financial services company of repute, offering various financial services to suit every requirement/need of our customers. By virtue of its access to millions of Indian Shareholders, in addition to companies, banks and financial institutions, Karvy has in the process built up a positive reputation with regulatory authorities and other government agencies. Our emphasis on the quality of the services, we offer, has been instrumental in helping us to attain the leadership in the financial services sector. We have a track record of handling 70 public/rights issues as Merchant Bankers. During the last two years we have handled the share buyback issues of TTK LIG Limited, Sirpur Paper Mills Limited, Bhagyanagar Metals Limited, A V Thomas Group-Nelliampathy Tea and Produce Company Limited, Chordia Food Products Limited, Heritage Foods (India) Limited, Titanor Components Ltd, Punjab Communications Limited, etc. to name a few. We have also handled/are handling the Rights/Public issues of Dhanalakshmi Bank, Dhandapani Finance, Moschip, Karur Vysya Bank, Lux Hosiery Industries Ltd, Sah Petroleums Limited, Paradyne InfoTech Limited, Yash Papers Limited, SPL Industries Limited, Provogue (I) Limited, Tulip IT Services Limited, Gati Limited as lead managers to name a few. We have actively marketed bond issues of corporations from the States of Maharashtra, Karnataka & Gujarat and debt issues of all the Financial Institutions like IDBI, ICICI, IFCI, REC, PFC, SIDBI, etc.

As an Investment Banker, Karvy provides:

Management of Capital Issues Management of Buybacks, Takeovers and Delisting offers Private Placement of Debt and Equity Mergers and Amalgamations, Loan Syndication

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KARVY COMMODITIES BROKING PRIVATE LIMITED:Focus on taking commodities trading to new dimensions of reliability and profitability. We have made commodities trading, an essentially age-old practice, into a sophisticated and scientific investment option. Here we enable trade in all goods and products of agricultural and mineral origin that include lucrative commodities like gold and silver and popular items like oil, pulses and cotton through a well-systematized trading platform. Our technological and infrastructural strengths and especially our street-smart skills make us an ideal broker. Our service matrix is holistic with a gamut of advantages, the first and foremost being our legacy of human resources, technology and infrastructure that comes from being part of the Karvy Group. Our wide national network, spanning the length and breadth of India, further supports these advantages. Regular trading workshops and seminars are conducted to hone trading strategies to perfection. Every move made is a calculated one, based on reliable research that is converted into valuable information through daily, weekly and monthly newsletters, calls and intraday alerts. Further, personalized service is provided here by a dedicated team committed to giving hassle-free service while the brokerage rates offered are extremely competitive. Our commitment to excel in this sector stems from the immense importance those commodities broking has to a cross-section of investors, farmers, exporters, importers, manufacturers and the Government of India itself. Visit us at www.karvycomtrade.com

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KARVY MUTUAL FUND SERVICES:Investment is the stepping stone to achieving one's financial dreams. Mutual funds offer an opportune way to long-term wealth creation. However, with more and more funds flooding the market, the task of selecting the most suitable scheme gets even more complicated. Mutual Fund Advisory Service at Karvy guides you through this maze and ensures that your investments are backed by our quality research. We, at Karvy help you to reach your goals by offering: * Products of 33 AMCs * Research reports (existing funds & NFOs; strategy reports etc.) * Customized mutual fund portfolios * Portfolio revision (depending on changing market outlook and evolving trends) * Access to online consolidated portfolio statement

IPO INTRODUCTION PVT LTD: An Initial Public Offer (IPO) is a means of collecting money from the public by a company for the first time in the market to fund its projects. In return, the company gives the share to the investors in the company. In an IPO, the Lead managers decide the price of the issue. In a book building offer, the syndicate members decide the indicative price range and the investors decide the price of the issue through a tender method. A draft prospectus provides the information on the financials of the company, promoters, background, tentative issue price etc. It is filed by the Lead Managers with the Securities & Exchange Board of India (SEBI) to provide issue details. Overview of the draft prospectus can be seen on www.sebi.gov.in (SEBI's web site click here). The final prospectus is printed after obtaining the clearance from SEBI and the Registrar of Companies (ROC).

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KARVY FIXED INCOME SECURITYIES & TRADING (K-FIST):It was started in December 2002 with a roll out from 7 dedicated centers of Karvy. The Retail Debt Market division which is centralized at the HO in Hyderabad provides fixed income products to its clients and is primarily a fund based activity. The deal sizes vary from Rs.10.000 to Rs.5 cores. Products - Central Government securities, State Development Loans, State Guaranteed bonds, Public Sector Undertaking Bonds, Financial Institution Bonds, and Bank bonds of SLR/Non-SLR category, both taxable and tax-free. Target clients - Provident Fund Trusts, Educational & Religious trusts, charitable trusts, and Co-operative banks, Regional Rural Banks, Corporate, and High Net worth Individuals Standard Operating Procedures - Based on the specific needs of the prospects Quotes of all categories of bonds are sent. The selection of instrument is done and post negotiation (if any) the settlement date is finalized. Contract notes are exchanged and written confirmations are obtained before initiating the trade settlement. On the agreed settlement date, the funds and securities are exchanged between the parties. Primarily all the trades are in the electronic mode only. The Wholesale Debt Market division is centralized at Mumbai and is a voice based order matching activity which is fee based. The deal size is a minimum of Rs.5 cr. And the reporting is done on the NSE. Products - Central Government securities, State Development Loans, State Guaranteed bonds, Public Sector Undertaking Bonds, Financial Institution Bonds, and Bank bonds of SLR/Non-SLR category, both taxable and taxfree. Target clients: Co-operative banks, commercial banks, Corporate, Financial Institutions, Insurance companies and Asset Management Companies. Standard Operating Procedures - The dealers generate 2-way quotes during the trading hours and match the institutional buyers and sellers. The deal contract notes are generated and exchanged between the 2 parties. The fees are collected by raising debit notes on a monthly basis.

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KARVY REALITY (INDIA) LIMITED (KRIL):It is promoted by the KARVY Group, Indias largest integrated financial services group. The group carries forward its legacy of trust and excellence in investor and customer services delivered with a passion for services and the highest level of quality that align with global standards. KRIL is engaged in the business of real estate and property services. * Buying/ selling/ renting of properties * Identifying valuable investments opportunities in the real estate sector * Facilitating financial support for real estate and investments in properties * Real estate portfolio advisory services. KRIL is your personal real estate advisor guiding and hand holding you through real estate transactions and offering valuable investment opportunities. Building on the KARVY brand as a leading industry benchmark for world class customer servicing and quality standards, KRIL brings to investors a reputation of reliability, dependability and honesty. Our understanding of the needs and preferences of our clients and our teams of qualified realty professionals help us to establish fruitful relationships with buyers and sellers of properties alike. A single stop shop for realty services offering: * Transacting Options: Choose to buy, sell or rent properties (residential and commercial) * Investing Options: Give your investments a good opportunity with properties marketed by KRIL. * Financing Options: Get unmatched deals for financing your investment * Research Options: We undertake valuation and feasibility studies, area analysis and customized analysis on behalf of clients.

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KARVY INSURANCE BROKING PRIVATE LIMITED:At Karvy Insurance Broking (P) Ltd. we provide both life and non-life insurance products to retail individuals, high net-worth clients and corporate. With the opening up of the insurance sector and with a large number of private players in the business, we are in a position to provide tailor made policies for different segments of customers. In our journey to emerge as a personal finance advisor, we will be better positioned to leverage our relationships with the product providers and place the requirements of our customers appropriately with the product providers. With Indian markets seeing a sea change, both in terms of investment pattern and attitude of investors, insurance is no more seen as only a tax saving product but also as an investment product. By setting up a separate entity, we would be positioned to provide the best of the products available in this business to our customers. Our wide national network, spanning the length and breadth of India, further supports these advantages. Further, personalized service is provided here by a dedicated team committed in giving hassle-free service to the clients.

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KARVY PORTFOLIO MANAGEMENT SERVICE LIMITED: KARVY is a premier integrated financial services provider, and ranked among the top five in the country in all its business segments. KARVY owes its success to its professionally managed team of experts, who have been chosen from some of the most reputed institutions and firms across India. In today's intricate and volatile market your investment requires constant monitoring and attention. The demand made on your time and energy by other business may not leave you with capacity to attend to your personal portfolio with the degree of care you deem appropriate. We at KARVY understand your situation and offer PMS services taking the same level of care and attention you would devote to monitoring your portfolio. Green Wallet is an Endeavour specially designed by Karvy to enhance the wealth of a niche segment of investors. This service primarily meant for HNIs (High Net worth Individuals) offers customers a wide range of schemes. These unique schemes seek to achieve higher returns through broad based participation in equity markets. This is achieved by creating a diversified equity portfolio of small, medium and large capitalized companies.

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KARVY DEPOSITORY SERVICES LIMITED:Stock Broking Limited provides depository services to investors as a Depository Participant with the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The Depository system in India links Issuers, National level Depositories, Depository Participants and Clearing Houses / Clearing Corporation of Stock Exchanges. Our demat services are accessible through any of our network of over 575 branches / investor service centers located in over 375 cities and towns across the country. Our demat services business has the distinction of having all its operations ISO 9001: 2000 certified with state-of-the-art technology and operations capabilities. Our demat services has innovated over time and we provide online access to account statements and transaction alerts through SMS to its clients. KARVYs Demat services offer you a secure, convenient and paperless way to keep track of your investments in shares and other security instruments over time, without the hassle of handling paper based transcripts. We provide the following services: * Dematerialization of Shares * Dematerialization of Shares * Transfer of Shares * Pledging of Shares * Electronic Custodial Services * Maintenance of Beneficial Holdings * Electronic Credit against Corporate Actions

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QUALITY POLICY OF THE COMPANY:To achieve and retain leadership, Karvy shall aim for complete customer satisfaction, by combining its human and technological resources, to provide superior quality financial service, in the process, Karvy will strive to exceed customers expectation. Quality Build-in-house processes Objectives: As per the quality policy, Karvy well: that will insure transparent and harmonious relationship with its clients and establish a partner relationship investor to provide high quality of services. With its investors service agent and vendors that will help in keeping up it Provide high quality of work life for all its commitments to the customers. Employees and equip them with adequate knowledge and skills so as to respond to Continue to uphold the values of honesty customers needs. Integrity and Use strive to establish unparalleled standard and business ethics. State-of-the art information technology in developing new and innovative financial products and services to meet the changing needs of investors. Strive to be a reliable source of value-edit products and services clients. Constantly guide the individuals and institutions in making judicious. Strive to keep all stakeholders (share holders, clients, choices of same, investors, employees, suppliers and regulatory authorities) proud and satisfy. To achieve & sustain market leadership, Karvy shall aim for complete customer satisfaction, by combining its human and technological resources, to provide world class quality services. In the process Karvy shall strive to meet and exceed customer's satisfaction and set industry standards.

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ORGANISATION

Karvy was started by a group of five chartered accountants in 1979. The partners decided to offer, other than the audit services, value added services like corporate advisory services to their clients. The first firm in the group, Karvy Consultants Limited was incorporated on 23rd July, 1983. In a very short period, it became the largest Registrar and Transfer Agent in India. This business was spun off to form a separate joint venture with Computer share of Australia, in 2005. Karvys foray into stock broking began with marketing IPOs, in 1993. Within a few years, Karvy began topping the IPO procurement league tables and it has consistently maintained its position among the top 5. Karvy was among the first few members of National Stock Exchange, in 1994 and became a member of The Stock Exchange, Mumbai in 2001. Dematerialization of shares gathered pace in mid-90s and Karvy was in the forefront educating investors on the advantages of de-materializing their shares. Today Karvy is among the top 5 Depositary Participant in India. While the registry business is a 50:50 Joint Venture with Computer share of Australia, we have equity participation by ICICI Ventures Limited and Barings Asia Limited, in Karvy Stock Broking Limited. Karvy has always believed in adding value to services it offers to clients. A top-notch research team based in Mumbai and Hyderabad supports its employees to advise clients on their investment needs. With the information overload today, Karvys team of analysts help investors make the right calls, be it equities, mf, insurance. On a typical working day Karvy: * Has more than 25,000 investors visiting our 575 offices * Publishes / broadcasts at least 50 buy / sell calls * Attends to 10,000+ telephone calls * Mails 25,000 envelopes, containing Annual Reports, Dividend cheques/ advises, allotment / refund advises * Executes 150,000+ trades on NSE / BSE * Executes 50,000 debit / credit in the depositary accounts * Advises 3,000+ clients on the investments in mutual funds First ISO - 9001: 2000 Certified Registrar in India.

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STRATEGY OF THE COMPANY:

Karvy believes that the foremost ingredient for success has been the co- operation ability to continuously evolve both organizational structure and product offerings, thereby remaining on the cutting financial services. Karvy believes that three capitals viz., financial, human and technology, would drive the financials services sector in the future and draw the boundaries for achieving leadership. Karvy believes that customized solutions are now the key drivers for market share and profit margins.

DEVELOPMENT ACTIVITIES:
Karvy has sought to broaden the scope of its activities by examining all sectors of the economy and by introduction new concepts, new instruments and in some cases new institution to response to perceived needs. In this regards, Karvy developmental activities have encompassed such diverse areas as financial investment, insurance, depository participants services, skill development activities etc. It has also been a pioneer in setting up PAN. TAN services, and also setting up specialized institution in certain key sections. 1. TIN facilitation centre. 2. Stock broking centre. 3. Financial centre. 4. Banking centre. 5. Registrar of the issues. A separate department is present with the sole intent of providing financial services to various charitable educational and social welfare organizations. First Largest mobilize of funds as per PRIME DATABASE.

MISSION OF COMPANNY:
Our mission is to be a leading and preferred service provider to our customers, and we aim to achieve this leadership position by building an innovative, enterprising , and technology driven organization which will set the highest standards of service and business ethics.
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ACHIEVEMENTS

A category- 1- Merchant banker. ISO- 9002 certified Registrar in India. Ranked as the most admired category- 1- Registrar to public issues, Handled over the largest ever public issue IDBI. Registrar by MARG. Handling the reliance account, this accounts 500 public issues as Registrars. First depository participants in Andhrafor nearly 10 million account holders.

Major issues managed as arrangers:

Kerala state Electricity Board. Pradesh Power Finance Corporation. A.P. water resources development corporation. Major issues A.P. state electricity board. Haldia petrochemicals Ltd. managed as co-managers. Indus land Bank Ltd. ICICI Bonds-March97. ICICI Bonds-dec.97. ICICI safety Bonds-April.98, July.98, Oct.98, Dec.98, Jan.99. The Jammu & Major issues handled and registrar to issues. Kashmir BankLtd. IDBI equity. Morgan Stanley mutual fund. Bank of Baroda. Bank of Punjab Ltd. Corporation Bank.

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Indus land Bank Ltd. Jammu & Kashmir Bank Ltd. Housing and Urban development corporation (HODCO) Ltd. Madras Refineries Ltd. BPL Ltd. Birla 3M Ltd. Essar shipping Ltd. Essar stels Ltd. Hindustan Petroleum Corporation Ltd. Infosys technologies Ltd. Jindal Vijay Nagar Steels Ltd. Nagarjun fertilizers and chemicals Ltd. Rajshree Polyfil Ltd.

KARVY SECURITIES LTD

Karvy has secured over Rs. 500 crore in the following ICICI Bonds (Andhra Pradesh Road Development Corporation Ltd. debt issues ICICI Bonds-97-II. ICICI Bonds- 97-I ICICI Bonds96, Private placement). IDBI Flexi IDBI Flexi Bond-I ICICI Bond 96. ICICI Safety BondMarch 98. Krishna Kerala State Electricity Board. IDBI Flexi Bonds III Bond II Andhra Pradesh Water Power Finance Corporation Ltd. Bhgya Jala Nigam Ltd. Andhra Pradesh state Electricity Board. Resources Development Corporation.

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KARVY SERVICES AN OVERVIEW

1.Stock broking 2.Demat services 3. Investment product distribution 4. Investment advisory services 5.Corporate finance & Merchant banking 6. Insurance 7. Mutual fund services 8. IT enabled services 9. Registrars & Transfer agents 10. Loans

1. Stock Broking: KARVY is working as Capital Market Intermediaries. Stockbrokers are regulated by SEBI [Stockbrokers and Sub-brokers] Regulations, 1992. The stockbroker is a member of the stock exchange. Stockbrokers are the intermediaries who are allowed to trade in securities on the exchange of which they are members. They buy and sell on their own behalf as well as on behalf of their clients. Stockbrokers expand their business by engaging sub-broker. Sub-brokers mean any person not being a member of a stock exchange who acts on behalf of a stock broker as an agent or otherwise for assisting the investors in buying, selling or dealing in securities through such stock-brokers.

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2. Demat Services: Karvy is a depository participant with the National Securities Depository Limited (NSDL) for trading and settlement of dematerialized shares.

Depository Participants (DPs) are described as an agent of the depository. They are intermediaries between the depository and the investors. The relationship between the DPs and the depository is governed by an agreement made between the two under Depositories Act. A DP can offer depository-related services only after obtaining a certificate of registration from SEBI. Since Karvy is also in the broking business, investors who use Karvys depository services get a dual benefit.

3. Investment Products Distribution: Company is also concern with the distribution of investment products like (a). Fixed Deposit (b). Bonds (c). IPO

(a) FIXED DEPOSITS:KARVY is dealer of 34 fixed deposits of various types which includes fixed deposits of Public Sector, Non Banking Finance Companies, Housing Finance Companies and Manufacturing Companies. Company is dealer of following Fixed Deposits PUBLIC SECTOR 1 HUDCO 2 Sardar Sarovar Narmada Nigam Ltd. 3 Tamilnadu Power Finance Corporation Ltd. 4 NTPC
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[ Public Sector FD with which Karvy deals]

NON BANKING FINANCE COMPANIES 1 Ashok Leyland Finance Ltd. 2 Bajaj Auto Finance Ltd. 3 Birla Home Finance Ltd. 4 Cholamandalam Investment & Finance Co. Ltd. 5 Escorts Finance Ltd. 6 First Leasing Company of India Ltd. 7 IDBI Suvidha 8 Nicco Uco Alliance Credit Ltd.

[ FD of Non Banking Finance Companies with which Karvy deals]

HOUSING FINANCE COMPANIES 1 Can Fin Homes Ltd. 2 Dewan Housing Finance Corporation Ltd. 3 Gruh Finance Ltd. 4 HDFC Ltd. 5 PNB Housing Finance Ltd. 6 Sundaram Home Finance Ltd.

[ FD of Housing Finance Companies with which Karvy deals]

MANUFACTURING COMPANIES

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1 A P Paper Mills Ltd. 2 Amtek India Ltd. 3 Atul Ltd. 4 Ballarpur Industries Ltd. 5 Chambal Fertilizers & Chemicals Ltd. 6 Escort Ltd. 7 Greaves Ltd. 8 Gujarat Alkalies & Chemicals Ltd. 9 Indian Express 10 Ind-Swift Ltd. 11 JK Industries Ltd. 12 Jindal Steel & Power Ltd. 13 Sound Craft Industries Ltd. 14 Supreme Industries Ltd. 15 Zuari Industries Ltd. [ FD of Manufacturing Companies with which Karvy deals]

(b) BONDS:Karvy is dealer of following bonds RBI Saving Bonds NHB REC

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(c) IPO:Company is also provides services related to Initial Public Offer of company. Company provides stationary at the time of IPO as well as provides information to investors regarding IPO and solves their queries.

4. Investment Advisory Services: This division provides portfolio management services to high net-worth individuals and corporate. The expertise of Karvy in research and stock broking gives it the right perspective to provide investment advisory services. Company provides advisory services to its clients. Financial goal of each individual investor varies according to his dream, ambition and family size and future financial planning for the children & old age pension for self and wife so does the pathway to achieve it. Karvy apply the principles of Financial Planning as both science & art, it understands the time horizon, risk bearing capacity and investment goals of investors keeping in mind their psyche and financial needs. Based upon this Karvy helps individual investors to plan their entire life up to retirement, Taxes, Insurance needs and other important personal financial goals. It designs portfolio for investor to invest their saving in various financial products like shares, bonds, debentures, mutual funds, fixed deposits, insurance etc., Company design portfolio by considering following factors. Investors requirement of getting money back,Investors willingness to take risk,Investors tax planning etc.

5. Corporate finance & Merchant banking: Corporate finance is the financial activity of corporation. It deals with the firm's operations with regard to investing and financing. It concerned with how firms raise capital and the consequences of alternative methods of raising capital. Firms capital can be raised by raising loans, issuing shares, and acquiring or merging with other businesses by public or private companies. Merchant banking is a financial intermediation that matches entities that need capital and those that have capital. Hence they facilitate the flow of capital in the market. Karvy enjoys SEBI category (I) authorization for Merchant Banking. Karvy offers the full
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spectrum of Merchant Banking Services, beginning from identifying the best time for an issue to final stage of marketing it, to harvest unparalleled success.As a merchant banker Karvy offer following services: Issue management Instrument designing Pricing of the issue Registration process for the issue of shares Marketing efforts Final allotment to investors Listing details on stock exchanges Loan syndication Lease financing Corporate advisory services Underwriting Portfolio management

6. Insurance: Karvy is also dealer of many private life insurance companies. At Jamnagar branch, company is associated with dealing of following companies. ICICI Prudential Life Insurance HDFC Life Insurance TATA AIG Life Insurance

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7. Mutual Fund Services: Since its inception in 1982, Karvy has demonstrated a dedication coupled with dynamism that has inspired trust from various segments corporate, government bodies and individuals. Karvy has since been performing a pivotal role as the intermediary the interface between these players. With Mutual Funds emerging as a distinct asset class, Karvy has made a strategic choice to leverage the power of latest technology to provide a cutting edge to its services. Karvy, today, service nearly 80% of the asset management companies (AMCs) across an extensive network of service centers with assets under service in excess of Rs.10,000 crores. Karvy's ability to mass customize and offer a diverse range of products for a diverse range of customers has helped mutual fund companies to uniquely position themselves in the market place. These diverse range of services cut across multiple delivery channels service centers, web, mobile phones, call center has brought home the benefits of technology to investors, distributors, and the mutual funds. Going forward, Karvy shall strive to create new products and services, which would address the needs of the end customer. Companys single minded focus in deliv ering products for customers has given it the distinguished position of being the preferred provider of financial services in the country. List of Mutual Fund Clients of KARVY: 1 Alliance Mutual Fund 2 Birla Mutual Fund 3 Bank of Baroda Mutual Fund 4 Can Bank Mutual Fund 5 Chola Mutual Fund 6 Deutsche Mutual Fund 7 DSP Merrill Lynch Mutual Fund 8 Franklin Templeton Investments 9 GIC Mutual Fund 10 HDFC Mutual Fund 11 HSBC Mutual Fund
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12 IL & FS Mutual Fund 13 JM Mutual FunD 14 Kotak Mutual Fund 15 LIC Mutual Fund 16 Punjab National Bank Mutual Fund 17 Prudential ICICI Mutual Fund 18 Principal Mutual Fund 19 Reliance Mutual Fund 20 State Bank of India Mutual Fund 21 Standard Chartered Mutual Fund 22 Sundaram Mutual Fund 23 SUN F&C Mutual Fund 24 Tata Mutual Fund

8. Income Tax enabled services: Karvy has been started this service since March, 2004. Karvy is work as TIN Facilitation Centre it provides following IT enabled services. a. Distribution of PAN Card. b. Distribution of TAN Card. c. Services related to e-TDS. Karvy work as an intermediary between NSDL and IT payers. Karvy provides various form for different IT enabled services and guide people to fill that forms. It also solves queries of the tax payers. It also distributes PAN and TAN card to the tax payers.

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9. Registrars & Transfer agents: In 1985, Karvy entered the Registrar and Share Transfer Business to create a market niche in the competitive field of financial services. In 1994-95, it reached a milestone when it processed 104 Public Issues constituting 46 per cent market share. Now in its second decade of existence, Karvy is the leader in the industry: In an opinion poll conducted by an independent market research agency - MARG, Karvy has been rated as Indias Most Admired Registrar on various parameters: Overall Excellence. Handling of Volumes Timely Dispatch Quality Management and Technological Up gradation. A SEBI Category 1 Registrar, So far, Karvy has handled over 675 ISSUES as Registrars to public issues processed over 52 million applications and is servicing over 16 million investors from various locations spread over 205 clients.

10. Loan: Karvy has recently started this service at selected branches of metro cities. This service has not been started in Saurashtra-Kucch region. Karvy provides loans for following. Vehicle Loan Home Loan Personal Loan

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MARKETING STRATEGY OF KARVY

Market Positioning:Market positioning statements of Karvy are At Karvy we give you single window service and We also ensure your comfort.So, Karvy focus on the consumers who prefer almost all investment activities at same place by providing number of various financial services. At Karvy a person can purchase or sell shares, debentures etc. and at the same place also demat it. Karvy also provides other investment option to the same person at same place like Mutual Fund, Insurance, Fixed Deposit, and Bonds etc. and help the person in designing his portfolio. By this way Karvy provides comfort to its customers.Karvy is also positioned according to Ries and Trout. Karvy is promoted as a no. 1 investment product distributor and R & T agent of India.

Target Market:Karvy uses demographic segmentation strategy and segment people based on their occupation. Karvy uses selective specialization strategy for market targeting. Target person for the Karvy Stock Broking and Karvy Investment Service are persons who can work as sub-broker for the companies. Companies focus on Advisors of Insurance and post office, Tax consultants and CAs for making sub-broker.

Marketing channel System:Karvy uses one level marketing channel for investment product distribution. Sub-brokers work as intermediary between consumer and company. Company has both forward and backward flow of activity through channel. Company distributes stationery, brokerage, and information forward to its sub-broker. The sub-brokers send filled forms, queries, amount of investment etc. back to the company.

Training Channel Members:Karvy provides training to the sub-brokers because they will be viewed as the company by the investors. The executives of Karvy explain various new schemes of investment to the subbrokers with its objective, risk factors and expected return. Company also periodically arrange seminar to guide sub-brokers.

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Advertising and Promotion: The objective of advertising of Karvy is to create awareness about services of Karvy among investors and sub-brokers and increase sub-brokers of Karvy. Company doesnt give advertisement in media like TV, Newspapers, and Magazines etc. Karvys advertisement is made indirectly by the companies associate with it. Karvy is R & T agent of around 700 companies. They publish name, address and logo of Karvy on their annual report. Karvy also publish its weekly Stock Market Newsletter Karvy Bazaar Baatein and monthly magazine The Finapolis to guide investors and sub-brokers about market.

HR POLICY OF KARVY
Karvys HR Department is located at Hyderabad. Recruitment and Selection Policy:The upper level members like zonal managers, regional managers, branch managers and senior executives are recruited by publishing recruitment advertisement in leading national level newspaper. The qualified applicant are then called for interview and selected. The regional manager has authority to select lower level employee like peon, marketing executives, accountant etc. by approval of zonal manager. Training and Development:-

Continuous training and upgrading technical, behavioral and managerial skills is a way of life in Karvy. Karvy encourages employees to hone their skills regularly to enable them to face the challenges of the changing requirements of customers that fit market up and down. Training needs analysis is done on a regular basis and systematic methodologies are ensured that skills and capabilities of all employees are constantly upgraded to enable them to perform in the challenging work environment. New employee has given training under experienced employee. The new employee work under experience employee and observe his all activities. When company employs new technology or there is any change in the working of company the training program is arranged.

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Employee Motivation:Karvys employees are highly empowered. They dont have to report any person of the same branch but they report upper level branch. E.e. Marketing executive of Jamnagar branch directly reports Senior Marketing executive of Baroda zonal office. If particular branch earn certain profit then Karvy gives them special incentives.

E.g. last year Karvy had arranged two days tour of Div for their employees of Rajkot, Jamnagar, Junagadh and Bhavnagar branch which was totally free of cost. This also helps in maintaining co-operation between employees.

COMPETITORS DETAILS
1. Bajaj Capital It was established in 1964 at Delhi. In 1965 it innovates a new financial instrument Companies Fixed Deposits and becomes the first company to raise Fixed Deposits. The objective of company is to provide professional guidance to investors on where, when and how to invest and to assist the corporate sector in its resource raising activities. Bajaj Capital became the first company to set up Investment Centers all over India for this purpose. Today, Bajaj Capital has 90 offices in over 40 important Indian Cities and has a team of around 500 employees nationwide. Services provided

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Merchant banking Buying and Selling of Money Market Investments Distribution of financial products Investment Advisory Service Company fixed deposits Bonds Mutual funds Life insurance General insurance Pension schemes Post office schemes Tax saving schemes Insurance linked investment schemes Initial public offerings Housing loans NRI schemes Car insurance

Financial Planning: Investment planning Retirement planning Insurance planning Children's future planning Tax planning

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 Short-term cash flow planning

2. MCS Ltd. It is established in 1985 in Delhi. It is one of the largest Data Processing House employing more than 600 people. MCS Ltd. has 8 branches all over India. Volumes Handled Share registry activities for over 100 corporate servicing over 10 million investors. Mutual fund operations for 25 funds, servicing over 4.5 million investors. Billing & settlement plan for Indian operations of IATA Geneva for 1.2 million tickets per annum covering (26 airlines & over 1200 agents). Services Offered:Registrars and Transfer Agents Registrars to IPOs /Right Issues Registrars to Open Offers Registrars to Mutual Funds Data Processing for Airlines

Print Shop Services :MCS is a major player in these activities in the Country with a market share of about 25%. MCS today provides these services to over 140 Corporate and Mutual Funds for a total investor base of 15 million.

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3. N.J.India Investments Pvt. Ltd. NJ India Invest (formerly known as NJ Capital stocks) was started in 1994 to cater to the growing financial services sector. NJ India Invest evolved out as a client focused need based investment advisory firm. NJ regards mutual fund as one of the best investment avenue available to satisfy any kind of investment need.

4. ICICI Securities Ltd. ICICI Securities Limited (i-SEC) is a wholly owned investment-banking subsidiary of ICICI Limited. ICICI is the only non-Japanese Asian financial institution to be listed on the New York Stock Exchange (NYSE). ICICI Securities was formed on 22nd Feb. 1993, when ICICI's Merchant Banking Division was spun off into a new company, ICICI Securities today is India's leading Investment Bank and one of the most significant players in the Indian capital markets. ICICI Brokerage Services Limited (IBSL) set up in March 1995, IBSL is a 100% subsidiary of i-SEC. It commenced its securities brokerage activities in February 1996 and is registered with the National Stock Exchange of India Limited and The Stock Exchange, Mumbai. ICICI has started a website ICICIdirect.com which is the most comprehensive website, which allows you to invest in Shares, Mutual funds, Derivatives (Futures and Options) and other financial products. ICICI has a large network of branches all over India. Services offered: Merchant Banking Demat Service Stock Broking

5. HDFC HDFC is the leading financial company in India. IT has large network of branches all over India. HDFC Securities which is fully subsidiary of HDFC provides demat service.

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HDFC and its subsidiary provides following services. Demat Service Life Insurance Banking Service Housing Finance Vehicle Finance Education Loan Personal Loan Mutual Fund

6. Kotak Securities Ltd. Kotak Securities needs no introduction as one of the largest stock broking houses in the country and a leading distributor of primary market offerings. Kotak Securities limited is a joint venture between Kotak Mahindra Bank and Goldman Sachs, the international investment banking and brokerage firm. Kotak Securities is a corporate member of both the BSE and the NSE. It is also a depository participant with the National Securities Depository Limited (NSDL) for trading and settlement of dematerialized shares. Services offered:Stock Broking Financial Product Distribution Demat Services Investment Advisory Services

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7. Motilal Oswal Securities Ltd. Motilal Oswal Securities Ltd (MOSt) is one of the leading equity research and broking houses of India. MOSt has a 20-member research team, which is engaged round the clock in analyzing the Indian economy and corporate sectors to identify equity investment ideas. Asia Money Broker's Poll 2002 has rated MOSt as one of the best Indian broking house, for research, for the second time since 2000. Motilal Oswal is member of NSDL and CDSIL for DP. It has wide network of branches. It has 158 branches all over India. Services Offered: Demat Services Stock Broking Investment Advisory Service

PRODUCT DETAILS
Mutual funds serve as a link between the saving people and the capital market in that they mobilize saving from investors and bring them to borrowers in the capital markets. In short, it is a common pool of money into which investors place their contribution that is to be invested in accordance with a stated objective. A mutual fund uses the money collected from the investors to buy those assets, which are specially permitted by its stated investment objective. When an investor subscribes to a mutual fund, he/she buys a part of asset or the pool of funds that are outstanding at that time. A mutual fund is constituted as an investment company and an investor buys into the fund, means he buys the share of the fund and is known as a unit holder. Since each unit holder is a part of owner of a mutual fund, it is necessary to establish the value of his part. Since the unit
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held by an investor evidences the ownership of the funds assets, the value of the total asset of the fund when divided by the total number of units issued by the mutual fund gives us the value of one unit. This is called as Net Asset Value (NAV).

HISTORY OF MUTUAL FUND

Development of Mutual Funds in India The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank the. The history of mutual funds in India can be broadly divided into four distinct phases:FirstPhase-1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management

SecondPhase1987-1993 (entry of public sector fund)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990. At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 crores.
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Third Phase 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under management was way ahead of other mutual fiunds.

Fourth Phase

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and
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with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.

MUTUAL FUND A GLOBALLY PROVEN INVESTMENT

Worldwide, the mutual fund has a long and successful history. The popularity of mutual fund has increased manifold. In developed financial market, like US mutual funds have almost overtaken bank depositsand total assets of over US $ 3 trillon. In India, Mutual Fund industry started with the setting up of UTI in 1964. Public sector banks and financial institution began to establish Mutual Funds in 1987. The private sector and foreign institutions were allowed to set up Mutual Fund in 1993.

WHAT IS MUTUAL FUND?

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 is shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.

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Digrame of mutual fund

Advantage:-

1. Portfolio Diversification: Each investor in a fund is a part owner of all the funds assets, thus enabling investor to hold a diversified investment portfolio even with a small amount of investment, which would otherwise require big capital.

2. Professional Management: Mutual Funds provide the services of experienced and skilled professionals, backed by a dedicated investment research team that analyze the performance and prospect of companies and selects suitable investments to achieve the objectives of the scheme.

3. Diversification: Mutual Fund invests in a number of companies across a broad cross-section of industries and sectors. This diversification reduces the risk because all stock can not go through a downtrend at the same time and in the same proportion. You achieve this diversification through a mutual fund with powerless money that you can do on your own.

4. Reduction of Transaction Cost: The investors bear all the cost of investing such as brokerage or custody of securities. When going through the fund investor has the benefit of economies of scale; the funds pay lesser cost because of larger volumes, a benefit passed on to its investors.

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5. Liquidity: By investing in Mutual Funds the investors can cash their investment by selling their units to the fund if open-ended, or selling them in the stock market if the fund is close ended.

6. Convenience & Flexibility: Mutual Funds Companies offer investor to transfer their holding from one scheme to other.

7. Tax Benefits: The investors are totally exempt from paying any tax on the income they receive from the Mutual Funds. Investment up to 10000 in ELSS qualifies for tax rebate of 20%.

8. Regulatory oversight: Mutual funds are subject to many government regulations that protect investors from fraud.

9. Convenience: You can usually buy mutual fund shares by mail, phone, or over the Internet.

10. Well regulated

Limitations:1. No Control over Costs: An investor in a mutual fund has no control over the overall cost of investing. He/she has to pay investment management fees as long as he/she remains with the fund. Fees are payable even while the value of the investment may be declining.

2. No Tailor made Portfolios: Investors who invest on their own can build their own portfolios of shares and bonds and other securities. Investing through fund means he/she delegates this decision to the fund managers.
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3. Managing a Portfolio of Funds: Availability of a large number of funds can actually mean too much choice for the investor. He/she may again need advice on how to select a fund to achieve his/her objectives, quite similar to the situation when he/she has to select individual shares or bonds to invest in.

4. Entry and Exit Cost: When large bodies like a fund invest in shares, the concentrated buying or selling often result in adverse price movements i.e. at the time of buying, fund has to pay high and vise-versa.

5. No Guarantees: No investment is risk free. If the entire stock market declines in value, the value of mutual fund shares will go down as well, no matter how balanced the portfolio. Investors encounter fewer risks when they invest in mutual funds than when they buy and sell stocks on their own. However, anyone who invests through a mutual fund runs the risk of losing money.

STRUCTURE OF INDIAN MUTUAL FUNDS

Mutual fund industry is highly regulated by the government keeping in view of the protection of investors interest as well as to maintain operational transparency. In India SEBI Regulations Act, 1996, guides the formation and operation of Mutual Funds. A Mutual Fund comprises of 4 separate entities.
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1. Sponsor 2. Board of Trusties 3. Asset Management Company 4. Custodian and Depositories 5. Distributors

1. Sponsor:
Sponsor is defined under SEBI regulation as any person who, acting alone or in combination with another body corporate, establishes a mutual fund. The sponsor gets the fund registered with SEBI. The sponsors form a trust and appoint a Board of Trustees. The sponsor must contribute at least 40% of the net worth of the AMC. The sponsor must posses a sound financial track record over 5 years prior to registration.

2. Board of Trustees:
Mutual funds are managed by Board of Trustees. Trust is created by a document called the Trust Deed that is executed by fund sponsor in favour of trustees. The trustees appoint the AMC and custodian with the prior approval of SEBI. They also approve all the schemes floated by the AMC. They have right to dismiss the AMC, with the approval of SEBI. Half of the trustees should be independent persons. Neither the AMC, nor its employees can act as trustee. A trustee can not be appointed as a trustee of two or more mutual funds until and unless he is an independent person or has permission from the Mutual Fund where he is trustee. Trustees can be removed only by prior approval of SEBI.
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3. Asset Management Company:

The role of an AMC is to act as the investment manager of the Trust under the Board supervision and direction of the Trustees. The AMC is required to be approved and registered with SEBI. The AMC of a Mutual Fund must have a net worth of at least Rs. 10 crore at all time. The AMC can not act as a trustee of any other Mutual Fund. They will float schemes only after obtaining the prior approval of the Trustees and SEBI. The director of AMC should be a person of reputed of high standing and at least have five years experience in relevant field. AMC can be terminated with 75% unit holders or majority of trustees.

4. Custodian and Depositories:

As per SEBI Regulations Mutual Funds shall have a custodian who is not any way associated with the AMC. It carry outs the activity of safe keeping the securities or participating, in any clearing system. The custodian should be independent from sponsors and AMC and should have a sound track record and adequate relevant experience. As Indian capital markets are moving away from having physical certificates to ownership of these securities in dematerialized form with Depository. Mutual Funds dematerialized securities are hold by depository participant.

5. Distributors:
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For a fund to sell units across a wide retail base of individual investors, an established network of distribution agents is essential. AMCs usually appoint Distributors or Brokers, who sell units on behalf of the fund. A broker usually acts on behalf of several mutual funds simultaneously and may have several sub-brokers under him for the purpose of distribution of units.

MUTUAL FUND CYCLE

From the shown cycle, it can be observed clearly that how the money from the investors flow and they get returns out of it. With a very small amount of fund, investors pool their money with fund managers. After studying the market, the fund manager invests money of the investors in various securities like shares, bonds, debentures, government securities etc. to achieve goal of the investors. With ups and downs in the market returns are generated and they are passed on to the investors in form of dividend or capital gain or lost. The above cycle is very clear and also very effective. The fund manager while investing on behalf of investors takes into consideration various factors like time, risk; amount etc. so that he/she can make proper investment decision.

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Types of Mutual Fund

1 By objective: Investment goals vary from person to person. While somebody wants security, others might give more weightage to returns alone. Somebody else might want to plan for his childs education while somebody might be saving for the proverbial rainy day or even life after retirement. With objectives defying any range, it is obvious that the products required will vary as well. So, Mutual funds can be classified based on the objectives of the investor. (a) Equity Fund:Equity funds invest a major portion of their corpus in equity shares issued by companies. NAV of equity funds are fluctuated by fluctuation in price of shares that it holds. So there is a high risk as well as high return in equity fund. Potential to earn in such funds is higher when they are invested for long term.The leading example of such funds are:Prudential ICICI Growth Plan, Tata Pure Equity Fund, Reliance Vision, Franklin India Prima Fund etc.

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(b) Debt Fund:Debt funds invest in debt instruments debt instruments issued by governments, private companies, banks and financial institutions. By investing in debt, these funds target low risk and stable income investors. These funds are low risk low return funds. The leading examples are:Birla Income Plus, Principal Income Fund, HDFC Income Fund, UTI Bond Fund etc.

(c) Balanced Fund:A balanced fund is one that has a portfolio comprising debt instruments as well as preference and equity shares. The idea is to reduce volatility of funds, while providing some upside for capital appreciation. They are best suitable for the people looking for a combination for capital appreciation and regular income and best time spend for such investment is more than 3 years.The leading examples are:Prudential ICICI Balanced Fund, Birla Balance Fund, Franklin India Balance Fund, Sundaram Balance Fund etc.

(d) Money Market Fund:Money market funds invest in securities of a short-term nature, which generally means securities of less than one-year maturity such as Treasury Bills issued by governments, Certificates of deposit issued by banks and Commercial paper issued by companies. The major strength of money market funds are the liquidity and safety of principal that the investors can normally expect from short term investments.The leading examples are:Prudential ICICI Liquid Plan, Templeton India Liquid Fund,
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Grindlays Cash Fund etc.

(e) Gilt Fund:These funds are sort of government funds wherein the investments are made in debt instrument of government, which carry no risk of non payment of interest as the RBI manages the payment of interest and principal on the investments. These funds are best suited for regular income and long term investment objectives.the leading examples are:Prudential ICICI Gilt Fund, Tata Gilt Securities Fund, Templton India Government Securities Fund etc. 2 By Duration:

(a) Open-ended Fund:An open ended fund is one that is available for subscription and repurchase on a continuous basis. These schemes do not have a fixed maturity period. Investors can conveniently buy and sell units at NAV related prices which are declared daily basis. The key feature of this fund is liquidity. (b) Close-ended Fund:A close ended fund has a stipulated maturity period e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of initial public issue and thereafter they can buy or sell units on stock exchange where the units are listed at NAV. These mutual fund schemes disclose NAV generally on weekly basis.

(c) Interval Fund:Interval funds combine the features of open-ended and close-ended schemes. They are open for sale or redemption during pre determined intervals at NAV related prices. Risk Return Grid Risk Tolerance/Return Expected Focus Suitable Products Benefits offered by MFs
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Low Debt Bank/ Company FD, Debt based Funds Liquidity, Better Post-Tax returns Medium Partially Debt, Partially Equity Balanced Funds, Some Diversified Equity Funds and some debt Funds, Mix of shares and Fixed Deposits Liquidity, Better Post-Tax returns, Better Management, Diversification High Equity Capital Market, Equity Funds (Diversified as well as Sector) Diversification, Expertise in stock picking, Liquidity, Tax free dividends

3 By Load:

(a) Load Fund:Marketing of new mutual fund scheme involves initial expenses. These initial expenses may be recovered from the investors by entry or exit load. (i). Entry Load or Front-end Load: If initial expenses recovered from investors at the time of investors entry into the fund, by deducting a specific amount from his initial contribution it is called Entry Load. (ii). Exit Load or Back-end Load: If initial expenses recovered at the time of the investors exit from the scheme, by deducting a specified amount from the redemption proceeds payable to the investor it is called exit load. (iii). Deferred Load: The load amount charged to the scheme over a period of time is called a deferred load.

(b) No Load Fund:Funds that dont charge entry, exit, or deferred load or any other charges for sales expenses are called no load funds. Now, generally all Mutual Fund companies charge 2 to 2.5% entry load on equity fund.
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Generally there is no exit load on equity and sectoral funds to maintain liquidity of that funds. Generally there is no entry load on gilt scheme and income fund. There is 0.25 to 1% exit load on gilt and income fund if investors exit from fund before specified time which is generally 3 to 6 months.

4 Other types of fund:

(a) Tax Saving Funds:These schemes offer tax rebates to the investors under specific provisions of the Income Tax Act, 1961 as the Government offers tax incentives for investment in specified avenues. E.g. Equity Linked Saving Scheme (ELSS). Pension schemes also offer tax benefits.The leading examples are:Prudential ICICI Tax Plan, Templeton India Pension Plan, Franklin India Taxshield etc.

(b) Index Funds:Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty), etc. These schemes invest in the securities in the same weightage comprising of an index. NAV of such funds are changed accordance with the change in the index.The leading examples are:Birla Index Fund, HDFC Index Fund, Prudential ICICI Index Fund, UTI Index Fund etc.

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(C) Sector Funds:These are the funds which invest in the securities of only those sectors or industries as specified in the offer documents. E.g. Pharmaceuticals, Software, Petroleum etc. These types of funds are more risky compared to diversified funds. The leading examples are:Birla IT Fund, Pru. ICICI FMCG Fund, Franklin India Pharma Fund etc. (d) Commodity Funds:Commodity funds invest into the different commodities directly or through shares of commodity companies. E.g. Commodity fund invest in gold or shares of gold mines. Commodity funds have not yet developed in India.

(e). Off Shore Funds: These funds invest in equities in one or more foreign countries there by achieving diversification across the countrys borders. However they also have additional risks such as the foreign exchange rate risk and their performance depends on the economic conditions of the countries they invest in.

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PROBLEM FORMULATION
Marketing Research being a logical process definitely follows our predetermined sequence or steps in order to obtain the desired results or outcomes. Though the entire process of Marketing Research is quite complex and requires a considerable degree of knowledge and skill, the step of the Problem Formulation is the most challenging and critical one for the researcher as well as the research. It is rightly said that a problem, well defined is half solved. In todays competitive world companies can not afford to reactive, instead the trend is toward proactive. It is due to the increasing competition that the companies can not afford to undertake research until something goes wrong. This can curtail the future growth or even affect the very existence of the organization seeing to the trend of being proactive in the future; companies are allocating more resources to the disciplines of research. In such case it becomes a duty of researcher to ensure that the organization gets an optimum return on the resources it has invested. Thus, Problem Formulation assumes great importance in Marketing Research. The Marketing Research project undertaken by me for the Karvy Securities Limited encompasses within its scope, the study of The Mutual Fund and to find out market potential of KARVY Investor Service Ltd. with special reference to distribution of Mutual Fund in Aligarh City. Company wants to increase its sub-brokers who can work as intermediary between company and the investors.

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SWOT ANALYSIS OF KARVY MUTUAL FUNDS

Strengths:
Employees are highly empowered. Strong Communication Network. Good co-operation between employees. Number 1 Registrar and Transfer agent in India. Number 1 dealer of Investment Products in India.

Weaknesses:
High Employee Turnover.

Opportunity:
Growth rate of mutual fund industry is 40 to 50% during last year and it expected that this rate will be maintained in future also.Marketing at rural and semi-urban areas.

Threats:
Increasing number of local players. Past image of Mutual Fund.

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RESEARCH METHODOLOGY
1. Research Design: A research design is a pattern or an outline of a research projects working. It is a statement of only the essential elements of a study, those that provide the basic guidelines for the details of the project. It comprises a series of prior decision that taken together provide master plans for executing a research projects. A research design serves as a bridge between what has been established i.e., the research objectives and what is to be done, in conduct of the study to relish those objectives. If there were no research design, the research would have only foggy notions as about what is to be done. I have used Cross-Sectional Research of Exploratory Research . The research is of both qualitative as well as quantitative type.

2. Unit of Analysis: Mutual Fund Advisors.

Characteristics of interest:
Advisors knowledge about Mutual Fund Advisors knowledge about Karvy Advisors interest in getting knowledge of Mutual Fund Advisors willingness to deal in Mutual Fund with Karvy Advisors preference in selecting tax saving instrument of investment Advisors preference in selecting dealer

3. Sources of Data: a. Primary Source:The primary data is collected using sampling method and by survey using questionnaire. b. Secondary Source:Page 57

Secondary data includes information regarding present market scenario, Information regarding Mutual Funds and competitors are collected by Internet, Magazines and News papers and books.

4. Sample Planning: Sample Size: 50 units Sample Extent: Haldwani City Sampling Design: A Sample Design is a definite plan for obtaining a sample from a given population. It refers to the technique or method the researcher would adopt in selecting items for the sample.I have used both Convenience Sampling Method

5. Data Collection Method: I have used Survey Method to collect data. I have collected data using questionnaire.

Questionnaire Plan
I have used Structured Questionnaire for gathering the required data through contacting respondent personally.

Type of Information:
I have collected Fact, Awareness, Attitude, Future action plan and reason using questionnaire.

Type of Questions:
Close-ended questions or Dichotomous and Multiple Choice type are asked in the questionnaire for data collection.
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6. Data Analysis & Interpretation:

Data Analysis is based on the data collected by way of Questionnaires. From the collected data findings are extracted. The data is tabulated and frequency distribution chart is prepared.

RESEARCH ANALYSIS AND INTERPRETATION

1. As a financial investment adviser which investment options you suggest to your customers? Mutual Fund Insurance Fixed Deposit Tax Bond PPF

2. Please indicate reason for choosing above. Returns Risk Safety Tax Benefits Timely Brokerage

3. If a service person who pays Income Tax wants to invest, generally which option do you suggest for investment? Insurance Mutual Funds

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4. Are you interested to deal in MF? Yes No

5. Do you know about MF services provided by Karvys Haldwani Branch? Yes No

6. Are you interested in attending a seminar arranged by Karvy to guide investors about MF? Interested Not Interested.

7. Would you like to work with Karvy Securities Ltd. for dealing in mutual fund? Yes No 7.1 If no, then the reason would be: Lack of knowledge No expansion plans

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CHAPTER III

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DATA COLLECTION:
I collect the data through questionnaire, which was filled by the people of the Haldwani City. The purpose of data collection is to know the satisfaction of customer towards the mutual fund services in Haldwani. The questionnaire is filled up by 50 people. In that data collection, I asked questions about the satisfaction of customer toward the MF services.

DATA ANALYSIS
I have analyzed the data in following manner using following satisfaction and dissatisfaction grounds: 1. Choosing criteria. 2. Dissatisfaction ground. 3. Rating among companies. 4. No of MF opened in Haldwani.

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CUSTOMER SATISFACTION
1. Name: 2. Gender: 3. Occupation: 4. Age: (A) Do you know the procedure for doing MF? Yes 73% No 27%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

73%

27%

Yes

No

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(B)Do you believe in MF company? Yes 25 Neutral 70 No 5

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

70%

25%

5%

Yes

Neutral

No

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C) What do you think MF is safe? Yes 29% Cant say 63% No 8%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

63%

29% 8%

Yes

Cant say

No

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(D) Why do you choose Karvy MF service? Goodwill 36% Service 42% Safety 22%
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

42% 36% 22%

Goodwill

Service

Safety

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(E) Do you think Investing inMF ? Yes 36% Neutral 38% Cant say 26%
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

38% 36% 26%

Yes

Neutral

Cant say

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(F) Do you know about the different types of investment alternatives? a) Mutual funds 72% b) Banks 86% c) Share market 54% d) Others 40%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

86% 72% 54% 40%

Mutual funds Banksl

Share market

Otherl

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OCCUPATION INVESTMENMT
Service Class 44%, Business Class 36%, Other 20%.
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

44%

36% 20%

Service Class

Business Class

Other

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CHAPTER IV

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FINDINGS
After getting in depth research study of Karvy, I came to know that Karvy is not much popular as other brands operating in Haldwani city. Bajaj Allianz, HDFC, ICICI are having much higher tapped market in respect to mutual funds. Karvy as an investment option in Mutual Fund does not posses much proficiency and potential customers in Haldwani city. Though the financial advisors advise their clients to go for Mutual Fund as a investment option. About 42% of advisors advise their clients to invest in Mutual Funds, followed by investing in Insurance sector.

The advisors after having a deep thought says that it is the Returns that mak e them convince their clients to go for investment in mutual funds. 36% of advisors said that it is the Returns which make a person to invest in Mutual Fund. Followed by Risk which is quite lesser in other investment options.

A huge lott of advisors showed a positive response in dealing of for Mutual Fund. About 60% of them said that they are interested in dealing for Mutual Funds, because that results in higher brokerage.

As far as Karvy is concerned about 91% of the advisors said that they are not aware of the services provided by Karvy, including Mutual Fund.

When asked, 53% of advisors said that they are not interested to work with Karvy Securities, to the contrary with they dont have any such expansion plans and they have little knowledge about Karvy.

In haldwanicity advisors dont have an appropriate knowledge about Karvy as a Investment hub.

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RECOMMENDATIONS
There is high potential market for Mutual Fund Advisors in Haldwani city, but this market needs to be explored as investors are still hesitated to invest their money in Mutual Funds.In Haldwani investors have inadequate knowledge about Mutual Funds, So proper Marketing of various schemes is required, company should arranges more and more seminars on Mutual Funds. Awareness of MF services provided by Karvy is also very low so company needs proper marketing of their all services by advertising, distribution of pamphlet, arranging seminars etc. Most of advisors are not interested in dealing of Mutual Funds because they dont want to expand their services due to lack of time, so company should provide them knowledge about single window services by which investor can get all financial services from one place. Company should also provide knowledge about the growth rate and the expected growth rate of Mutual Fund industry in India. Most of people aware of life insurance, NSC and PPF for tax saving so, company should market various tax saving schemes of Mutual Funds and their benefits. The interface among the investors and the Mutual Fund Companies is the agents, so the agents should have proper knowledge about Mutual Funds as well as market so that they can help investors in their investment decisions. The quality of agents performance and investors trust on them can be improved only if they are permanent in nature.

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CONCLUSION

Mutual Fund Advisors give emphasis on mutual funds than other investment options.Mutual Funds have given a new direction to the flow of personal saving and enable small andmedium investors in remote rural and semi urban areas to reap the benefits of the MF investment. Indian Mutual Funds are thus playing a very important developmental role in allocation of scares resources in the emerging economy.Karvy is not able to provide sufficient services to the investors due to unawareness among advisors regarding services.The awareness level of investor is low in advisors are interested in dealing in mutual fund.Very less advisors are knowing about services provided by karvy

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BIBLIOGRAPHY

www.nseindia.com www.karvy.com www.mutualfundsindia.com www.moneycontrol.com www.amfiindia.com www.valueresearch.com

www.reliancemutualfund.com
www.nsdl.co.in www.dewb-vc.com

Magazines: Business world. News paper: Business line, Business standard.

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2012

SUMMER PROJECT ON MUTUAL FUNDS KARVY STOCK BROKING LTD.

(In the partial fulfillment of requirement for award of the degree of Masters of Business Administration)

Submitted to Mrs. Garima j. Lecturer (Project guide) Amrapali institute of management and Computer application

Submitted By: Kamal Kishor Pargaien

(MBA-III Sem.)

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