SUMMER TRAINING REPORT SUBMITTED TOWARDS THE

PARTIAL FULFILLMENT OF POST GRADUATE DEGREE IN

INTERNATIONAL BUSINESS

CUSTOMERS PERCEPTION
TOWARDS INVESTMENTS IN
EQUITY MARKET

SUBMITTED BY:
VIVEK KUMAR GARG
MBA-IB (2009-20011)
Roll No. : A1802009165

INDUSTRY GUIDE FACULTY GUIDE

MR. DEEPAK BANGA DR. AJIT MITTAL
BRANCH SALES MANAGER
DESTIMONEY ENTERPRISES PVT. LTD.

AMITY INTERNATIONAL BUSINESS SCHOOL, NOIDA

AMITY UNIVERSITY – UTTAR PRADESH

1
 Company Certificate

DESTIMONEY ENTERPRISES PVT. LTD.

TO WHOM IT MAY CONCERN

This is to certify that Vivek Kumar Garg, a student of Amity

International Business School, Noida, undertook a project on
“Customers Perception towards Investments in Equity Market” at
Destimoney Enterprises Pvt. Ltd. from 03/05/2010 to 30/06/2010.

Mr. Vivek Kumar Garg has successfully completed the project under
the guidance of Mr. Deepak Banga. He is a sincere and hard-working
student with pleasant manners.

We wish all success in his future endeavours.

Mr. Deepak Banga,

Branch Sales Manager
Destimoney Enterprises Pvt. Ltd.

2
 CERTIFICATE OF ORIGIN

This is to certify that Mr. Vivek Kumar Garg, a student of Post Graduate
Degree in MBA - IB, Amity International Business School, Noida has
worked in the Destimoney Enterprises Pvt. Ltd., under the able guidance
and supervision of Mr. Deepak Banga, Branch sales Manager,
Destimoney Enterprises Pvt. Ltd.
The period for which he was on training was for 8 weeks, starting from
03/05/2010 to 30/06/2010. This Summer Internship report has the requisite
standard for the partial fulfillment the Post Graduate Degree in International
Business. To the best of our knowledge no part of this report has been
reproduced from any other report and the contents are based on original
research.

Signature Signature
Dr. Ajit Mittal Vivek Kumar Garg

3
 ACKNOWLEDGEMENT

I express my sincere gratitude to my industry guide Mr. Deepak

Banga, Branch Sales Manager, Destimoney Enterprises Pvt.
Ltd. for his able guidance, continuous support and cooperation
throughout my project, without which the present work would not
have been possible.

I would also like to thank the entire team of Destimoney

Enterprises Pvt. Ltd., for the constant support and help in the
successful completion of my project.

Also, I am thankful to my faculty guide Dr. Ajit Mittal of my

institute, for his continued guidance and invaluable
encouragement.

Signature
Vivek Kumar Garg

4
Index

5
Chapter No. Subject Page No.

Ch. # 1.0 Executive Summary………………….

Ch. # 2.0 Research Methodology………………

2.1 Primary Objective(s)………….
2.2 Hypothesis……………………
2.3 Research Design………………
2.4 Sample Design………………..
2.5 Scope of the Study…………….
2.6 Limitations…………………….

Ch. # 3.0 Critical Review of Literature……….

Ch. # 4.0 Company Profile …………………….

4.1 Industry Profile………………..
4.2 SWOT Analysis………………….

Ch. # 5.0 Data…………………………………..

5.1 Primary Data……………………
5.2 Secondary Data….……………..

Ch. # 6.0 Findings & Analysis………………….

Ch. # 7.0 Recommendations……………………

Ch. # 8.0 Bibliography………………………….

Ch. # 9.0 Annexure……………………………..

Ch. # 10.0 Case Study…………………………..

Ch. # 11.0 Synopsis of the project………………….

6
 Chapter 1

Executive
Summary

7
Indian investor had to endure a sluggish economy, the steep market
declines prompted by deteriorating revenues, alarming reports of
scandals ranging from illegal corporate accounting practices like
that of Satyam to insider trading to make investment decisions.
By the time Indian economy has shown a remarkable improvement
since the last year’s recession. As a result of that stock market is
able to attract large number of Indian investors from past one year
or so.

Stock market has been subjected to speculations and inefficiencies,

which are beached to the rationality of the investor. Traditional
finance theory is based on the two assumptions. Firstly, investors’
make rational decisions; and secondly investors are unbiased in
their predictions about future returns of the stock. However
financial economist have now realized that the long held
assumptions of traditional finance theory are wrong and found that
investors can be irrational and make predictable errors about the
return on investment on their investments. This empirical study on
Individual Investors’ Behavior is an attempt to know the profile of
the investor and also know the characteristics of the investors so as
to know their preference with respect to their investments. The
study also tries to unravel the influence of demographic factors like
gender and age on risk tolerance level of the investor.

This project is an attempt to analyze the characteristics of the

Indian individual investors and makes an attempt to discover the
relationship between a dependent variable i.e. Risk Tolerance
level and independent variables such as Age, Gender of an
individual investor on the basis of the small research/survey. This
study is also an attempt to understand the concept of risk & return
through portfolio manager by a third party service provider.

8
Indian investors are high income, well educated, salaried, and
independent in making investment decisions and conservative
investors. From the research it was found that irrespective of
gender, most of the investors (41%) are found have low risk
tolerance level and many others (34%) have high risk tolerance
level rather than moderate risk tolerance level.

It is also found that there is a strong negative correlation between

Age and Risk tolerance level of the investor. Television is the
media that is largely influencing the investor’s decisions.

Hence, this study can facilitate

1. The investment product designers to design products which

can cater to the investors who are low risk tolerant.

2. The third party service providers to increase their level of

service quality approach through efficient portfolio
management in order to compete in the perfect service
market.

3. This empirical study is also used as an input to fill the service

quality gaps.

9
 Chapter 2

Research
Methodology

10
3.1 PRIMARY OBJECTIVES

1. To identify the objective of investment plan of an Indian

individual investor.

2. To know the preferred investment avenues of the Indian

individual investor segregated in terms of financial literacy.

3. To know the risk tolerance level of the individual investor in

order to suggest a suitable investment portfolio.

4. To identify the preferred sources of information influencing

investment decisions.

5. To study the dependence/independences of the demographic

factors (Gender and Age) of the investor and his/her risk
tolerance level.

3.2 HYPOTHESIS
Hypothesis 1:
H01: Gender of the investor and the Risk tolerance level are two
independent attributes of the investor.

Hypothesis 2:
H02: With Increase in Age decreases the Risk tolerance level.
There is a negative correlation between Age & Risk Tolerance.

Hypothesis 3:
H03: There is a significant role of third party service
providers/intermediaries in minimizing the risk in equity
market.

11
3.3 RESEARCH DESIGN

TYPE OF RESEARCH:

A research work is done in order to discover the relationship

between dependent variable i.e. Risk tolerance level and
independent variables such as Age, Gender of an individual
investor on the basis of the survey. To study the investors’
behavior a descriptive research is used.

DATA SOURCES:

The research is supported by collective interpretation of primary

data and secondary data sources.

DATA COLLECTION METHOD:

Data collection method used is totally based on customer

interaction. Individual meetings were conducted with different
investors. Every meeting was followed by taking inputs on the
designed questionnaire, provided in the annexure.

METHODOLOGY:

Based on the responses of the questionnaire, analysis has been

carried out. Statistical methods such as Chi-square test of
independence of attributes and Correlation have been used to
uncover relationships among the variables.

12
 DATA ANALYSIS:

1. For measuring the risk tolerance level cumulative scale has

been used.

2. To study the dependency/Independency of the factors Chi-

square test of independence of attributes was used.

3. Correlation is used to know the relationship between Risk

tolerance level and the Age of the investor.

4. This study strengthens the fact that Mutual funds are the best
available instruments in the financial market to minimize the
risk of investing money in equity market directly.

The questionnaire consists of 30 questions of which first 7

questions were focused to know the demographic characteristics
of the investor. 5 questions are designed to define the role of
third party service providers/intermediaries. Rest 13 questions
are to find the investment details, risk tolerance level of the
investor and were focused to accomplish the other objectives of
the study.

13
3.4 SAMPLE DESIGN

POPULATION OF THE STUDY:

The population for the study included the investor’s different

economic sectors/zones like service class investors, small
investors, self employed, chartered accountants, property
dealers etc. in Delhi and NCR region in order to understand the
necessary aspects of an individual investor.

SAMPLING TECHNIQUES:

Many investors were reluctant to reveal their investment details

especially the amount of money invested so; referral sampling
method is used for this empirical study.

SAMPLE SIZE:

Research has been carried out with a sample size of 50 investors

with which one can easily represent the population properly.

3.5 SCOPE OF THE STUDY

The study is totally based on investor’s behavior and perception
about investments considering the current scenarios in the
equity market. The biggest concern with the service providers is
the quality maintenance on sale and after sale of financial
products. This research is on present market scenarios as it is
supported by latest data and the outcomes are taken as an input
source in filling up the gaps in SERVQUAL GAP model
(Quality model) being proposed to Destimoney Enterprise Pvt.
Ltd.

14
3.6 LIMITATIONS
1. TIME CONSTRAINT:

This research is performed in a period of 40 days, so time

spent on the study might have an impact on actual findings.

2. GEOGRAPHICAL LIMITATIONS:

This study is done in selective areas of Delhi & NCR regions.

3. LACK OF HOMOGENOUS DATA:

The data collected is not homogeneous. Different investors

with different demographics with different perceptions are
selected. So homogeneity is difficult to achieve.

15
 Chapter 3

Critical Review of the

Literature

16
Stock market has been subjected to speculations and inefficiencies,
which are beached to the rationality of the investor. Traditional
finance theory is based on the two assumptions. Firstly, investors’
make rational decisions; and secondly investors are unbiased in
their predictions about future returns of the stock. However
financial economist have now realized that the long held
assumptions of traditional finance theory are wrong and found that
investors can be irrational and make predictable errors about the
return on investment on their investments.

This empirical study on Individual Investors’ Behavior is an

attempt to know the profile of the investor and also know the
characteristics of the investors so as to know their preference with
respect to their investments. The study also tries to unravel the
influence of demographic factors like gender and age on risk
tolerance level of the investor. Literature suggests that major
research in the area of investors’ behavior has been done by
behavioral scientists such as Weber (1999), Shiller (2000) and
Shefrin (2000). Shiller (2000) who strongly advocated that stock
market is governed by the market information which directly
affects the behavior of the investors.

Several studies have brought out the relationship between the

demographics such as Gender, Age and risk tolerance level of
individuals. Of this the relationship between Age and risk tolerance
level has attracted much attention. It was suggested that one’s
biological, demographic and socioeconomic characteristics;
together with his/her psychological makeup affects one’s risk
tolerance level. It was also suggested that an individual’s risk
tolerance is related to his/her household situation, lifecycle stage
and subjective factors. Mittra (1995) discussed factors that were
related to individuals risk tolerance, which included years until
retirement, knowledge sophistication, income and net worth.

17
Most of the scientists concluded that males are more risk tolerant
than females. Wallach and Kogan (1961) were perhaps the first to
study the relationship between risk tolerance and age. It is found
that risky asset fraction of the portfolio to be positively correlated
with income and age and negatively correlated with marital status.
Morin and Suarez found evidence of increasing risk aversion with
age although the households appear to become less risk averse as
their wealth increases. They found that the change in the risky
asset holdings were not uniform. He found individuals to increase
their investments in risky assets throughout their working life time,
and decrease their risk exposure once they retire. Lewellen et.al
while identifying the systematic patterns of investment behavior
exhibited by individuals found age and expressed risk taking
propensities to be inversely related with major shifts taking place
at age 55 and beyond.

Indian studies on individual investors' were mostly confined to

studies on share ownership, except a few. The RBI's survey of
ownership of shares and enquiry into the ownership pattern of
Industrial shares in India were a few in this direction. The
NCAER's studies brought out the frequent form of savings of
individuals and the components of financial investments of rural
households. The Indian Shareowners Survey brought out a volley
of information on share owners. Rajarajan V (1997, 1998, 2000
and 2003) classified investors on the basis of their demographics.
He has also brought out the investors' characteristics on the basis
of their investment size. He found that the percentage of risky
assets to total financial investments had declined as the investor
moves up through various stages in life cycle. Also investors'
lifestyles based characteristics has been identified. The above
discussion presents a detailed picture about the various facets of
risk studies that have taken place in the past. In the present study,
the findings of many of these studies are verified and updated.

18
 Chapter 4

Company Profile

19
 Enterprises Pvt. Ltd.

ABOUT DESTIMONEY

Destimoney’s origins can be traced back to the City of London

over 80 years ago. At that time called Dawnay Day, it entered
India in 2006, was purchased by New Silk Route in 2008, and
under its new share holders and management was renamed
Destimoney. NSR (New Silk Route) had acquired 100% stake in
the business.

Vivek Vig is the CEO of Destimoney group. He is former Country

Head of Centurion Bank of Punjab. He also worked as the Country
Head of Citibank in Saudi Arabia, Turkey Business Head in
Taiwan and Poland.
Currently, Destimoney has a network of over 130 branches spread
in over 70 locations in 20 states across the country. With an
unrelenting focus on twin values of "Integrity" and "Client First"
Policy, Destimoney, with the help of over 3000 employees and a
strong IT infrastructure, provides advisory services to individuals
and institutional clients in India and abroad.

FUNDING PARTNER – NEW SILK ROUTE

New Silk Route is a leading Asia-focused growth capital firm

founded in 2006 with over $1.4 billion under management, focused
on the Indian subcontinent, as well as other rapidly growing
economies in Asia and the Middle East.
NSR have made 9 Investments to date in sectors of Consumer
Services, Telecom, Manufacturing, Financial Services and
Infrastructure. They have a team of 16 Investment Professionals

20
working out of 4 offices; New York, Mumbai, Dubai, and
Bangalore.
FINANCIAL SERVICE DOMAIN

Destimoney is one of India’s leading retail financial services and

distribution companies, a world-class customer-centric services
enterprise that fulfils the financial needs of ‘Middle India, with
global processes and a focus on profitable growth.

Destimoney distributes all financial products, and manufactures a

select few. They develop individually structured financial products
for their customers - from universal real life needs for family,
security, health assurance and education to wealth creation and
home ownership; on to lifestyle and business requirements, and
continuing along the road to retirement and estate planning,

ALLINANCES & PARTNERSHIPS

• Strategic partnership with PNB to acquire up to a 49% stake

in its housing finance subsidiary.

• Destimoney recently entered into a partnership with

Dhanlaxmi Bank to enable the Bank’s customers to trade on
Destimoney’s online e-broking platform.

• Under the new partnership with Artha Money, Artha money’s

customers will be able to seamlessly access and use
Destimoney’s online equity trading platform, while
Destimoney’s customers will be able to use Artha Money’s
online commodity trading platform.

21
DESTIMONEY GROUP

22
The Destimoney Group at present has 4 business lines;
• Destimoney India Services Pvt. Ltd, which provides portfolio
management services.
• Destimoney Enterprises Pvt. Ltd, which provides financial
advisory services and distributes
o Insurance products

 Bajaj Allianz Life Insurance.

 Royal Sundram Health Cover.
o Loans
 Personal loans.
 Home loans (In partnership with Punjab National
Bank.)
 LAP (Loan against property).
o Fixed deposits, mutual funds, structured products.
• Destimoney Securities Pvt. Ltd., which deals with broking of
stocks & shares.
• Decimal Point Analytics, which is into global research
outsourcing businesses.

23
VISION

Destimoney vision is to build a world class customer centric

financial services enterprise that fulfils the financial needs of
“Middle India” with “Global Processes” and focuses on profitable
growth. Destimoney plans to do this, by distributing all financial
products and manufacturing a select few and building an
organization that unlocks the potential across four dimensions, viz.
individual, team, customer and market place.

MISSION

Organization’s mission is to forge strong, sustained relationships

with the clients by creating value for them within a transparent
and controlled investment process.

24
 4.1 INDUSTRY PROFILE
FINANCIAL SERVICES INDUSTRY IN INDIA

SPECIAL PREFERENCE TO MUTUAL FUND INDUSTRY

In last few years, India has emerged as the one of the most rapidly
growing economies in the world. India has been categorized with
nations like Brazil, Russia and China (BRIC Nations) who are
going to be the prime drivers of world economy in next few
decades. Even if we take the case of recovery form economic
downfall last year, India has managed to perform far better than
other nations. Right from banking system to financial regularities,
the country has thrived on discipline and out-performance. The
booming Indian economy resulted in widespread growth and
arrival of new industries. The most sparkling phenomenon is in
form of financial market of India.

Financial services in India has taken a giant leap from the days of
standing in banks queue for several hours for opening a saving
account or trying to get some fixed deposits (FD) done. The
financial services have increased manifold and now people have
the choice to choose the one that most suitably fits the bill.
There are several services like broking firms, investment services,
financial consulting, evergreen national banks, numerous private
banks, mutual funds, car and home loans, equity market and other
banking services. Services are many and offered by blue chip
names of the industry. Most of the companies in financial segment
offer taxation services, project consultancy services and all the
services of wide financial gamut. Whether it’s taking a car loan or

25
booking your favorite house, going for pension plan or getting
your child insured, numerous attractive financial services are
available at affordable costs. Personal banking services have
acquired an altogether new meaning. Now customers have multiple
choices to choose from. One can find all the financial services on
the internet that are just a call away.

THE MUTUAL FUND INDUSTRY

Mutual fund is a common pool of money in to which investors

with common investment objective place their contributions that
are to be invested in accordance with the stated investment
objective of the scheme. The investment manager would invest the
money collected from the investor in to assets that are defined/
permitted by the stated objective of the scheme. For example,
an equity fund would invest equity and equity related instruments
and a debt fund would invest in bonds, debentures, gilts
etc. Mutual Fund is a suitable investment for the common man as it

26
offers an opportunity to invest in a diversified, professionally
managed basket of securities at a relatively low cost.

MUTUAL FUND HISTORY INDIA

Unit Trust of India (UTI) was the first mutual fund set up in
India in the year 1963. In early 1990s, Government allowed public
sector banks and institutions to set up mutual funds. UTI has an
extensive marketing network of over 40,000 agents all over the
country. In the year 1992, Securities and exchange Board of
India (SEBI) Act was passed. The objectives of SEBI are – to
protect the interest of investors in securities and to promote the
development of and to regulate the securities market.

In 1995, the RBI permitted private sector institutions to set up

Money Market Mutual Funds (MMMFs). They can invest in
treasury bills, call and notice money, commercial paper,
commercial bills accepted/co-accepted by banks, certificates of
deposit and dated government securities having unexpired maturity
up to one year.

As far as mutual funds are concerned, SEBI formulates policies

and regulates the mutual funds to protect the interest of the
investors. SEBI notified regulations for the mutual funds in 1993.
Thereafter, mutual funds sponsored by private sector entities were
allowed to enter the capital market. The regulations were fully
revised in 1996 and have been amended thereafter from time to
time. SEBI has also issued guidelines to the mutual funds from
time to time to protect the interests of investors.

All mutual funds whether promoted by public sector or private

sector entities including those promoted by foreign entities
are governed by the same set of Regulations. There is no
distinction in regulatory requirements for these mutual funds and

27
all are subject to monitoring and inspections by SEBI. The risks
associated with the schemes launched by the mutual funds
sponsored by these entities are of similar type

TYPES OF MUTUAL FUNDS

A mutual fund scheme can be classified into open-ended scheme

or close-ended scheme depending on its maturity period.

Open-ended Fund

An open-ended Mutual fund is one that is available for

subscription and repurchase on a continuous basis. These Funds do
not have a fixed maturity period. Investors can conveniently buy
and sell units at Net Asset Value (NAV) related prices which are
declared on a daily basis. The key feature of open-end schemes is
liquidity.

Close-ended Fund

A close-ended Mutual 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 the initial public issue and thereafter they
can buy or sell the units of the scheme on the stock exchanges
where the units are listed. In order to provide an exit route to the
investors, some close-ended funds give an option of selling back
the units to the mutual fund through periodic repurchase at NAV
related prices. SEBI Regulations stipulate that at least one of the
two exit routes is provided to the investor i.e. either repurchase
facility or through listing on stock exchanges. These mutual funds
schemes disclose NAV generally on weekly basis.

Fund according to Investment Objective:

28
A scheme can also be classified as growth fund, income fund, or
balanced fund considering its investment objective. Such schemes
may be open-ended or close-ended schemes as described earlier.
Such schemes may be classified mainly as follows:

Growth / Equity Oriented Scheme

The aim of growth funds is to provide capital appreciation over the

medium to long- term. Such schemes normally invest a major part
of their corpus in equities. Such funds have comparatively high
risks. These schemes provide different options to the investors like
dividend option, capital appreciation, etc. and the investors may
choose an option depending on their preferences. The investors
must indicate the option in the application form. The mutual funds
also allow the investors to change the options at a later date.
Growth schemes are good for investors having a long-term outlook
seeking appreciation over a period of time.

Income / Debt Oriented Scheme

The aim of income funds is to provide regular and steady income

to investors. Such schemes generally invest in fixed income
securities such as bonds, corporate debentures, Government
securities and money market instruments. Such funds are less risky
compared to equity schemes. These funds are not affected because
of fluctuations in equity markets. However, opportunities of capital
appreciation are also limited in such funds. The NAVs of such
funds are affected because of change in interest rates in the
country. If the interest rates fall, NAVs of such funds are likely to
increase in the short run and vice versa. However, long term
investors may not bother about these fluctuations.

Balanced Fund

The aim of balanced funds is to provide both growth and regular

income as such schemes invest both in equities and fixed income

29
securities in the proportion indicated in their offer documents.
These are appropriate for investors looking for moderate growth.
They generally invest 40-60% in equity and debt instruments.
These funds are also affected because of fluctuations in share
prices in the stock markets. However, NAVs of such funds are
likely to be less volatile compared to pure equity funds.

Money Market or Liquid Fund

These funds are also income funds and their aim is to provide easy
liquidity, preservation of capital and moderate income. These
schemes invest exclusively in safer short-term instruments such as
treasury bills, certificates of deposit, commercial paper and inter-
bank call money, government securities, etc. Returns on these
schemes fluctuate much less compared to other funds. These funds
are appropriate for corporate and individual investors as a means to
park their surplus funds for short periods.

Gilt Fund

These funds invest exclusively in government securities.

Government securities have no default risk. NAVs of these
schemes also fluctuate due to change in interest rates and other
economic factors as is the case with income or debt oriented
schemes.

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. NAVs of such schemes would rise or fall in
accordance with the rise or fall in the index, though not exactly by
the same percentage due to some factors known as "tracking error"
in technical terms. Necessary disclosures in this regard are made in
the offer document of the mutual fund scheme. There are also

30
exchange traded index funds launched by the mutual funds which
are traded on the stock exchanges.

THE INDUSTRY CURRENT STATE

The Indian mutual fund industry has evolved from a single player
monopoly in 1964 to fast growing, competitive market on the back
of strong regulatory framework.

AUM (Assets under Management) Base and Growth Relative

To the Global Industry

Despite clocking growth rates that are amongst the highest in the
world, the Indian mutual fund industry continues to be a very small

31
market; comprising 0.32 percent share of the global AUM of USD
18.97 trillion.

Products

Debt products dominate the product mix and comprised 49 percent

of the total industry AUM as of FY 200915, while the equity and
liquid funds comprised 26 percent and 22 percent respectively.
Open-ended funds comprised 99 percent of the total industry AUM
as of March 2009.

Industry Structure

32
The Indian mutual fund industry currently consists of 38 players
that have been given regulatory approval by SEBI. The industry
has witnessed a shift has changed drastically in favour of private
sector players, as the number of public sector players reduced from
11 in 2001 to 5 in 2009.

33
The public sector has gradually ceded market share to the private
sector. Public sector mutual funds comprised 21 percent of the
AUM in 2009 as against 72 percent AUM share in 2001.

Operations

The Indian mutual fund industry while on a high growth path

needs to address efficiency and customer centricity. AMCs have
successfully been using outsourced service providers such as
custodians, Registrar and Transfer Agents (R&T) and more

34
recently, fund accountants, so that mutual funds can focus on core
aspects of their business such as product development and
distribution. Functions that have been outsourced are custody
services, fund services, registrar and transfer services aimed at
investor servicing and cash management. Managing costs and
ensuring investor satisfaction continue to be the key goals for all
mutual funds today. However, there is likely to be scope for
optimising operations costs given the trend of rising administrative
and associated costs as a percentage of AUM.

4.2 SWOT ANALYSIS

STRENGTHS

35
 • Destimoney Enterprises Pvt. Ltd. is a leading financial
service provider under Asia’s leading non financial
organization “New silk Route” with Strategic partnership
with PNB to acquire up to a 49% stake in its housing finance
subsidiary.

• Destimoney recently entered into a partnership with

Dhanlaxmi Bank to enable the Bank’s customers to trade on
Destimoney’s online e-broking platform.

• Under the new partnership with Artha Money, Artha money’s

customers will be able to seamlessly access and use
Destimoney’s online equity trading platform, while
Destimoney’s customers will be able to use Artha Money’s
online commodity trading platform.

• Destimoney’s product mix comprises established and

renowned companies for investments like Bajaj Allianz,
Royal Sundram etc.

• Destimoney’s biggest strength is in its efficiency in sale and

advisory of financial investment instruments.

WEAKNESSES

36
 • Destimoney is very new brand for investors in the market. So
it is struggling to make its name in the market due to intense
completion.

• Till now company hasn’t done much in terms of promotional

activities to attract the customers from the market.

• Company’s online service is only for its own products like

mutual funds and DMAT accounts.

• Company’s online service approach is not very effective as it

does not provide any kind of information about product and
investment details accept its business domain.

• Company is also struggling in acquiring new customers. The

customer acquisition rate is a bit slower as compare to its
competitors.

OPPORTUNITIES

• Company is concentrating on middle class investors under its

“middle India” Plan. But still there are other segments which
can be targeted simultaneously.

• Although company has done well in order to establish new

partnerships with financial & non financial institutions but
still company may expand its domain by involving new
product series in its product mix.

• Destimoney is also going to launch its own product line

along with currently available DMAT facility. So it will
provide a good opportunity to the company to promote it self
not as a third party service provider but also as a leading
financial service company.

37
THREATS

• As the company is new in the market, it is very selective

in its approach whether it is related to sale or to its
partners. But due to intense competition in the market,
company is finding it difficult to establish a brand value
against the companies like India Bulls, Religare, and
Standard Chartered etc.

• Aggressive promotional strategies by close competitors

may hamper Destimoney’s acceptance by new clients.

• The lack in technical knowledge about the products &

instruments among sales staff is not a cost effective
venture for the company.

38
 Chapter 5

Data

5.1 PRIMARY DATA

39
The primary data are those which are collected afresh and for
the first time, and thus happen to be original in character. We
collect primary data during the course of doing experiments in
an experimental research but in case we do research of the
descriptive type and perform surveys, whether sample surveys
or census surveys, then we can obtain primary data either
through observation or through direct communication with
respondents in one form or another or through personal
interviews.

In my research I personally organized the meetings &

interviews with individual customer and gathered the inputs in a
questionnaire designed for the same purpose. The questionnaire
used for the purpose is shown in the ANNEXURE.

5.2 SECONDARY DATA

The secondary data, on the other hand, are those which have
already been collected by someone else and which have already
been passed through the statistical process.

Secondary data used in the report is based on initial search on

internet for various similar empirical studies and journals by
various behavioral scientists and is being highlighted in the
ANNEXURE.

40
Chapter 6

Findings
&
Analysis

41
Table 1 and Table 2 show the Demographics and other
characteristics of the sample investors.

Table 1: Demographics of the sample Investor

Parameter Number of Percentage

Respondents
Gender
Male 40 80.0
Female 10 20.0
Total 50 100.0

Age (in Years)

Below 30 18 36.7
30-60 22 44.0
60 & above 10 20.0
Total 50 100.0

Martial Status
Unmarried 11 22.0
Married 39 78.0
Total 50 100.0

Employment Status
Salaried 33 65.3
Business 14 28.7
Retired (Others) 3 06.0
Total 50 100.0

Monthly Earnings(Rs.)
Up to 10000 1 2.0
10001 - 30000 15 30.0
30000 and above 34 68.0
Total 50 100.0

42
Education Level
Under Graduate 5 10.0
Graduate 22 43.3
Post Graduate & Above 23 46.6
Total 50 100.0

Financially Responsible
Only yourself 6 12.0
1 person in addition to yourself 5 10.7
2-3 persons in additions to yourself 18 35.3
4-5 persons in additions to yourself 16 32.7
>5 persons besides yourself 5 09.3
Total 50 100.0

Occupation
Accounts, Finance & Investment 22 43.3
Professionals 19 38.7
Others 9 18.0
Total 50 100.0

INTERPRETATION:

Table 1 above shows, that 40 (80%) of the investors are men

and the rest 10 (20%) are females. Generally males bear the
financial responsibility in Indian society, and therefore they
have to make investment (and other) decisions to fulfill the
financial obligations. When it comes to age, it was found that
36.7% are young and significant number (53.3%) of them is in
the age group of 35 to 50. The marital status of 78% of the
investors was found to be married and the rest are unmarried.
This is because a married individual is considered to have
dependents so relatively more invested and involved in making
financial investments. Nearly 65% of the investors belong to the

43
salaried class, 29% were business class and the rest were retired.
It was found that 68% of investors whose monthly earnings
above rupees 30000 are interested in investments since these
people have surplus amount due to which they are able to think
of investments. 23(47%) of the individual investors covered in
the study are postgraduates; 22(43%) investors are graduates
and 5(10%) of the investors are under-graduates. From table 1,
it is interesting to note that most investors (covered in the study)
can be said to possess higher education (Bachelor Degree and
above), and this factor will increase the reliability of
conclusions drawn about the matters under investigation.
22(43%) of the investors covered in the study have been found
to be in professions related to finance, accountancy, investment,
banking, broking, and financial management etc and 19(39%) of
the respondents are software engineers, architects, medical and
dental practitioners, teachers, lawyers etc. 9(18%) of the
respondents can be said to belong to 'non-accounting or non-
financial' occupations and the other occupations.

44
Table 2: Other Characteristics of Sample Investor

Parameter Number of Percentage

Respondents
Reading Behaviour
4 or more sources 20 39.3
2-3 sources 13 26.7
Only one source 17 34.0
Total 50 100.0

Investment Decisions are based

Taken on own initiative 37 74.0
Own initiative but with the help of 9 18.0
expert
Made by expert on investors behalf 4 08.0
Total 50 100.0

Regularity of Investment
Decisions
Frequently 30 59.3
Not so frequently 20 40.7
Total 50 100.0

INTERPRETATION:

The study has attempted to enquire about other characteristics of

investor such as the reading behavior of the Investors. From table
2, it is noteworthy to find that 20 (39%) of the investors read four
or more sources, 13(27%) of the investors read two to three
sources, 17 (34%) of the investors only one source. One may
infer from the figures of table 2 that most investors tend not to
depend upon expert advice and help while making investment
decisions. However, the majority of the investors 37(74%) make
investment decisions without the help and advice from experts;

45
 only 9 (18%) investors consult some experts, for advice in
investment decisions. And 4 (8%) of the investors allow the
expert to take decision on their behalf. Most of the investors 30
(59%) make investment decisions on a regular basis.

OBJECTIVE OF INVESTMENT PLAN:

When investor was queried about his/her objective behind any

investment, given that all the available investment avenues
available to him will assure safety, liquidity and tax benefit, the
objective of investment plan of the investors is shown in the
following table 3.

Table 3: Objectives of investment plan

Parameter Number of Percentage

Respondents
Objective of Investment Plan
Capital appreciation 21 42.0
Balance of capital appreciation & 22 43.3
current income
Supplement of current income 7 14.7
Total 50 100.0

Based on table 3, we can conclude that the investors’ objective of

investment plan is capital appreciation or balance of capital
appreciation and current income. It is clear that investors invest to
accumulate wealth rather as an avenue to supplement their
income.

46
 PREFERRED INVESTMENT AVENUES:

Based on the quantity of risk, the investment avenues are

classified as follows – Fixed Deposits/Bonds, Insurance schemes,
Mutual Fund Schemes, Equities, Commodities and Real Estate.
Investors were asked to choose preferred avenues. The resultant
obtained, based on Weighted Mean Value is given in table 4

Table 4: Preferred investment avenues

Investment Avenues WMV Rank

Fixed Deposits/PPF/Bonds 5.2 I
Insurance Schemes 4.9 II
Mutual Fund Schemes 3.9 IV
Equities 4.2 III
Commodities/Derivatives 1.8 V
Real Estate 1.0 VI

From table 4, it can be concluded that the investors prefer

FD’s/Bonds/PPFs avenues than insurance schemes next to
Equities and Mutual Funds. It was interesting to know that Indian
individual investors still prefer to invest their surplus amount in
risk free investment avenues next to insurances schemes. Table 4
confirms that Indian investors are conservative investors.

Although the investors are not very sure about investing their
amount in equity market because of the its risky nature. Still they
have a clear point of view that MFs are the best available
instruments to invest the money in equity market through AMC’s.

47
FINANCIAL LITERACY:

When investors were queried about their financial literacy i.e.

their ability or knowledge about financial terms or aspects of
investments, it was found that most of the investors are financial
illiterates. And the responses are shown in table 5.

Table 5: Financial Literacy

Frequency Percentage
Financial Literates 19 37.3
Financial Illiterates 31 62.7
Total 50 100.0

In spite of majority of the occupants (22) are from accounts and

financial related jobs most of them astonishingly expressed
ignorance about the mechanism of investments, and the dynamics
of risk and returns.

48
SOURCES OF INVESTMENT INFORMATION:

When investors were asked to rank their various sources of

investment information, the following Weighted Mean Values
were obtained which are given in table 6.

Table 6: Sources of investment information

Sources of Investment Information WMV Rank

News Papers/Magazines 3.6 II
Electronic Media (T.V.) 3.9 I
Peer group/Friends 3.3 III
Broker/Financial Advisor 2.2 IV
Internet 2.0 V

Most of the investors get their information related to investment

through electronic media (TV- NDTV Profit, CNBC and some
business news channels) next to print media (News paper/
Business news paper/ Magazines). This could be because
Print/Electronic media is easy and readily accessible investment
information when compared to the other sources of investment
information.

49
TESTING OF HYPOTHESIS:

Hypothesis 1:

H01: Gender of the investor and the Risk tolerance level are two
Independent attributes of the investor.

Table 7: Gender and Risk Tolerance Level

LOW MODERATE RISK HIGH TOTAL

RISK RISK
MALE 16 12 12 40
FEMALE 5 1 4 10
TOTAL 21 13 16 50

From above table I tried to find out the expected values for each
risk level, which are as follows

The expectations of male investors:

Low risk group = 40 x 21 = 16.8

50

Moderate risk group = 40 x 13 = 10.4

50

High risk group = 40 x 16 = 12.8

50

50
The expectations of female investors:

Low risk group = 10 x 21 = 4.2

50

Moderate risk group = 10 x 13 = 2.6

50

High risk group = 10 x 16 = 3.2

50

We can now calculate value of χ2 as follows:

Groups Observed Expected 2

frequency frequency Oij - Eij (Oij–Eij)/ Eij
Oij Eij
Male
Low Risk 16 16.8 -0.8 0.04
Moderate 12 10.4 2.4 0.55
Risk
High Risk 12 12.8 -0.8 0.05

Female
Low Risk 5 4.2 0.8 0.15
Moderate 1 2.6 -1.6 0.98
Risk
High Risk 4 3.2 0.8 0.20
Total 1.97

51
 2
Hence, χ2 = ∑ (Oij–Eij)/ Eij = 1.97

Degree of freedom = (c-1)*(r-1) = (3-1)*(2-1) = 2.

The table value of χ2 for two degrees of freedom at 5% level of

significance is 5.991 which is much higher than the computed
value, 1.97, i.e.
χ2 (Tabulated) > χ2 (Calculated)

Hence, the hypothesis set stands true.

i.e. Gender of the investor and the Risk tolerance level are two
Independent attributes of the investor.

We conclude that Gender and Risk tolerance are the two

independent attributes of the investor. In the current empirical
analysis, it is found that irrespective of gender most of the
investors are low risk tolerant or high risk tolerant rather than
moderate risk tolerant. Generally, it is considered that women tend
to be risk averse in comparison with men.

52
Hypothesis 2:

H02: With Increase in Age decreases the Risk tolerance level.

There is a negative correlation between Age & Risk Tolerance.

Table 8: Age and Risk Tolerance Level

RISK
LOW MODERATE RISK HIGH TOTAL
AGE RISK (30 - 60)% RISK
(<30)% (>60)%
BELOW 30 6 3 9 18
30 – 60 11 6 5 22
ABOVE 60 4 4 2 10
TOTAL 21 13 16 50

The above table can be interpreted as follows:

X 0-30 30-60 >60

m 20 50 80
u -1 0 +1 f fv f v2 fuv
Y v
0-30 20 -1 6 3 0 9 -9 18 -18 18 -3
6
30-60 50 0 11 6 0 5 0 22 0 0 0
0
>60 80 +1 4 -4 4 0 2 2 10 10 10 -2
f 21 13 16 n=50 ∑ fv ∑ fv2 ∑
= = fuv
-8 28 =
-5
fu -21 0 16 ∑ fu
=
-5

53
 f u2 21 0 10 ∑ fu2
=
31
fuv 2 0 -7 ∑ fuv
=
-5
Where, m = mid value of the interval.

u = x(i) – Mid value & v = y(i) – Mid value

size of interval (d) size of interval (d)

Now substituting the table values into the formula given below,

Where r = Karl Pearson’s Coefficient

(-5) – (-5)*(-8)
r = 50

31 – 25 X 28 – 64
50 50

r = -5.08/28.5 = -0.79

By which we can conclude that there is a strong negative

correlation between Age and Risk tolerance. Age accounts for the
major differences in risk taking decisions by the investors. The
older an investor, the better seemed his/her performance in
comparison to the younger ones. Over-confidence in their own
investment ability among the youngsters largely accounts for the
excessive trading among younger investors leading to lower
returns and this direct to decline in the risk tolerance level.

54
Hence, set hypothesis stands true.

i.e. With Increase in Age decreases the Risk tolerance level.

There is a negative correlation between Age & Risk Tolerance.

Hypothesis 3:

H03: There is a significant role of third party service

providers/intermediaries in minimizing the risk in equity market.

When the investors were asked about their experience with third
party service providers like Religare, Sherkhan, India Bulls &
Destimoney. The responses were analysed, interpreted & tabulated
as under in table 7.

Table 9: Role of service providers/intermediaries

Parameter Number of Percentage

Respondents
Investment through 3rd party
service provider
Yes 36 72.0
No 14 28.0
Total 50 100.0

Knowledge about third party

service providers/intermediaries
Very Low 11 22.0
Low 6 12.0
Moderate 22 44.0
High 11 22.0
Total 50 100.0

55
Basis of choosing a service
provider/broker
Less brokerage charges or 12 24.0
commission
Effective fund allocation 19 38.0
After sale service 4 8.0
Transparency 5 10.0
Brand 10 20.0
Total 50 100.0

Amount invested through 3rd

party service provider
(10 – 20) % 8 16.0
(20 – 50) % 6 12.0
>50 % 14 28.0
Full Amount 22 44.0
Total 50 100.0

Mutual Funds – Better returns

with moderate risk
Disagree 3 6.0
Somewhat disagree 5 10.0
Somewhat Agree 8 16.0
Completely Agree 34 68.0
Total 50 100.0

Preference to invest in SIPs

Yes 42 84.0
No 4 8.0
Cant Say 4 8.0
Total 50 100.0

Met the return expectations with

third party service providers

56
 Not At all 6 12.0
Somewhat 5 10.0
Yes 23 46.0
Fully satisfied 16 32.0
Total 50 100.0
It’s very clear from table 7 that 72% of people like to invest
through third party service providers because of inadequate
knowledge about the instruments as well as due to lack of
experience. More than 40% investors supported to invest full
amount through the intermediaries. 68% of investors prefer mutual
funds as the best instrument to minimize the risk in equity market.
At the same time 84% of investors look toward the systematic
Investment plans (SIPs). All in all investors are satisfied/OK with
the services being provided by these service providers.

Hence, we can say that the set hypothesis stands true.

i.e. There is a significant role of third party service

providers/intermediaries in minimizing the risk in equity
market.

57
FINDINGS:

• The study reveals that male investors dominate the investment

market in India.
• Most of the investors possess higher education like graduation
and above.
• Majority of the Investors belong to accountancy and related
employment, non-financial management and some other
occupations are very few.
• Most investors read two or more sources of information to make
investment decisions.
• The investors’ decisions are based on their own initiative.
• The investment habit was noted in a majority of the people who
participated in the study.
• The objective of investment was either capital appreciation or
balance of capital appreciation and current income.
• Investors prefer to park their funds in avenues like
PPF/FD/Bonds next to Equities and Mutual Funds Scheme.
• Most of the investors get their information related to investment
through electronic media (TV) next to print media (News paper/
Business news paper/Magazines).
• Most of the investors are financial illiterates.
• Gender and the risk tolerance level of the investor are
independent attributes of the investor.
• Increase in age decreases the risk tolerance level.
• Third party financial service providers are playing a significant
role in investment market.

58
 Chapter 7

Recommendations
/Suggestions

59
RISK TOLERANCE LEVEL AND SUGGESTION OF
SUITABLE PORTFOLIO TO THE INVESTORS’

The role of uncertainty and the lack of knowledge about the return
on Investment Avenue are important components of any
investment. The extent of an investor’s ability to tolerate these
uncertainties of return is referred as risk tolerance level of an
investor. There are two common methods of estimating investors’
tolerance of risk.

The first method is a clear understanding of the investor and

his/her history with investment securities. The second method is to
use a questionnaire designed to elicit feelings about risky assets
and the comfort level of the investor given certain changes in the
portfolio or certain investment scenarios. The second method is
used to know the risk tolerance level of the investors. Based on the
responses to the questionnaire, the cumulative scale is constructed
and scores are assigned to each investor accordingly to categorize
the respondents in to i.e. Low, Moderate and High risk tolerance
level. The investors are divided into 3 categories i.e., A, B and C
depending on their risk tolerance starting with Low risk tolerance,
Moderate risk tolerance and High risk tolerance. Generally
investors with a low risk tolerance act differently with regard to
risk than individuals with a high risk tolerance. Investor with a
high level of risk tolerance would be comfortable with market
volatility, while low risk- individuals require stability and are
averse to uncertainties. Individuals with low levels of risk
tolerance require lower chances of a loss, choose not to operate in
unfamiliar situations and require more information about the

60
performance of an investment. From the sample of 50, it has been
found that 21 investors (41%) have low risk tolerance and these
investors should emphasize on capital preservation portfolio i.e.,
category A asset mix is suggested to them. 13 investors (25%)
have moderate risk tolerance and these in investors should
emphasize on balanced portfolio i.e., category B asset mix is
suggested to them. And 16 investors (34%) have high risk
tolerance and these investors should emphasize on aggressive
capital appreciation portfolio i.e., category C asset mix is
suggested to them.

Table 10: Risk Tolerance level and investor

Risk Tolerance Level Number of Investors Percentage

Low (Category A) 21 41
Medium (Category B) 13 25
High (Category C) 16 34
Total 50 100.0

The portfolio suggested to investors consists of four types of asset

classes i.e., Equities, Fixed Income Securities, Cash & Equivalents
and other Alternative assets such as art. Depending on their risk
tolerance the corresponding asset class has been increased or
decreased and corresponding asset mix has been suggested to each
category of investor. Each category of investors asset mix has been
described below.

Category A: Aggressive Capital Preservation Portfolio

This category of investor has low risk tolerance and should

emphasize aggressive capital preservation. Suggested optimal asset
mix is specified in figure 1.

Category B: Balanced Portfolio

61
This category of investors has moderate risk tolerance and should
emphasize a balanced approach to capital appreciation and capital
preservation. Suggested optimal asset mix is specified in figure 1.

Category C: Aggressive Capital Appreciation Portfolio

This category of investors has high-risk tolerance and should

emphasize aggressive capital appreciation. Suggested optimal asset
mix is specified in figure 1.

Figure 1: Suitable portfolio to the various category of investor.

62
SUGGESTIONS/INPUTS FOR SERVQUAL MODEL

This study also serves the purpose of developing a service quality

model (SERVQUAL GAP MODEL reference: SIX SIGMA Refer
to ANNEXURE) for the third party financial service provider. The
service gaps can be shortened through the following outcomes of
the study:

• AMCs should continuously design suitable schemes to meet

the triple needs of adequate returns, safety and liquidity in a
balanced proportion.
• Since the investors need for liquidity is found to be high, we
suggest that more of the new schemes opening for
subscription be Open-ended.
• The target segment can be broadly divided into institutional
segment and individual investor segment. The institutional
segment consisted of treasury departments of Corporate,
Trusts etc and suitable products such as Institutional Income
schemes and Money Market schemes can be targeted at them.
• The individual investor can be in turn divided into various
segments such as Young Families with small or no children,
Middle-aged People saving for retirement and Retired People
looking for steady income. Suitable products such as Growth
and Balanced schemes for young families and Income
schemes with sure and steady returns for retired people can
be marketed.
• By proper segmentation and by targeting the right product to
the right customer, Mutual Fund companies can hope to win
the confidence of their customers and 'own' them for a
lifetime.

63
• Negative perceptions about MFs require to be tackled
through appropriate investor education measures by
providing Investor Education Programmes.
• AMC/SPONSORS should develop investor education
literature specially tailored to suit the regional needs to
create/increase the awareness level of the investors.
• Employers can influence the investment decision of the
employees by providing financial education as a benefit to
employees. Employers can be objective in hiring an
independent financial advisor to conduct an education
programme on long-term investment strategies. Employers
have ready access to employees and the cost can be spread
over many employees.

64
 Chapter 8

Bibliography

65
BIBLIOGRAPHY:

http://www.destimoney.com/

https://www.dawnaydayavsecurities.com/

http://www.ripublication.com/

http://www.wikipedia.com/

http://www.morningstar.com/

http://www.investopedia.com/

http://www.financeindia.org/

BOOKS:

“Research Methodology” by Kothari C. R. 2nd Edition, New

Age International Publishers.

“Business Statistics” by Gupta S P & Gupta M P, 2000, 12th

Ed. Sultan Chand & Sons

66
 Chapter 9

Annexure

67
 INVESTOPEDIA

The use of this Investment Profiler is only for research purposes at

all relevant times subject to the Notes and conditional upon the
signing of Declaration at the end hereof.

Name: _______________________________________________

Contact Details: ______________________________________

The name of your financial services provider

(consultant):___________________________________________

Date prepared: ______________________________________

Signature: ____________

68
INVESTOR’S PROFILE:

1. Please specify your gender.

Male
Female

2. Please select your age group.

Below 30
30-60
60 & above

3. Please specify your martial Status

Unmarried
Married

4. Please specify your employment details

Salaried
Business
Retired (others)
Brand

5. Would you like to mention your monthly earnings?

Up to 10000
10001-30000
30000 & above

6. Please specify your educational detail.

Under Graduate
Graduate
Post Graduate & above

69
7. What is your occupation?
Accounts, Finance & Investment
Professionals
Others

INVESTOR’S INVESTMENT PROFILE:

8. Who takes the financial responsibility in your investments?

Only yourself
1 person in addition to yourself
2-3 persons in additions to yourself
4-5 persons in additions to yourself
>5 persons besides yourself

9. How many sources generally support or influence you to invest

in the market?
4 or more sources
2-3 sources
Only one source

10. Your investment decisions are based

Taken on own initiative
Own initiative but with the help of expert
Made by expert on investors behalf

11. What do you say about regularity of your investment

decisions?
Frequently
Not so frequently
12. What are your investment objectives?

70
 Capital appreciation
Balance of capital appreciation & current income
Supplement of current income
13. Please rate (1 to 5) your investment avenues in the order of
preference? (Please write your rating against the options)

Fixed Deposits/PPF/Bonds
Insurance Schemes
Mutual fund schemes
Equities
Commodities/Derivatives
Real Estate

14. What is your level of financial knowledge about the various

investment avenues in the market?
Excellent____________________________________1
Good_______________________________________2
Moderate____________________________________3
Not much___________________________________4
Very low____________________________________5

15. What are the various sources of investment information for

you?
Newspapers/Magazines
Electronic Media (T.V.)
Peer group/Friends
Broker/Financial advisor
Internet

16. What is your risk tolerance level for short term fluctuations in
your invested money in case of equity investments?
Very low____________________________________1
Low________________________________________2
Moderate____________________________________3

71
 High_______________________________________4
Very high__________________________________ 5

17. What is your attitude towards the following Financial

Instruments, in the Indian Capital Market? (Please mark the suitable option)
Highly Favourable Some What Not Very Not at all
Favourable Favourable Favourable favourable
a) Shares
b)Debentures
c)Mutual Funds
d)Bonds

18. Generally you prefer (Please Rank from 1 - first preference to 6

- last preference)
Growth Schemes
Balanced Schemes
Tax Saving Schemes
Income Schemes
Index Schemes

19. You Prefer:

Open End Schemes
Close End Schemes

20. Do you think Mutual fund investing is a best alternative to

equity investing?
Yes
No
Do not know

ROLE OF SERVICE PROVIDERS/INTERMEDIARIES

21. Would you recommend investing your money in equity market

through intermediaries/third party service providers?

72
 No
Yes

22. What is your knowledge level about different service providers

in the financial service market?
Very low__________________________________ 1
Low______________________________________ 2
Moderate__________________________________ 3
High______________________________________4

23. On what basis you choose a particular financial service

provider?
Less brokerage charges
Effective fund allocation
After sale service
Transparency
Brand

24. How much would you like to invest in equity market through
third party service providers?
(10-20)%
(20-40)%
(40-60)%
>60%
Full amount

25. Are you able to meet your return expectations through your
third party investor /service provider?
Not at all
Some what
Yes
Completely satisfied

73
GRAPHICAL REPRESENTATION OF THE FINDINGS

DEMOGRAPHICS

Figure 1 Figure 2

Figure 3 Figure 4

74
Figure 5 Figure 6
RISK TOLERANCE

Figure 7

75
Figure 8

Figure 9

76
 Figure 10

SERVQUAL – GAP MODEL

77
 Chapter 10

Case Study

78
 Chapter 11

Synopsis

79
INTRODUCTION

Stock market has been subjected to speculations and inefficiencies,

which are beached to the rationality of the investor. Traditional
finance theory is based on the two assumptions. Firstly, investors’
make rational decisions; and secondly investors are unbiased in
their predictions about future returns of the stock. However
financial economist have now realized that the long held
assumptions of traditional finance theory are wrong and found that
investors can be irrational and make predictable errors about the
return on investment on their investments.
This empirical study on Individual Investors’ Behavior is an
attempt to know the profile of the investor and also know the
characteristics of the investors so as to know their preference with
respect to their investments.

80
AIM

The study tries to unravel the influence of demographic factors like

gender and age on risk tolerance level of the investor. This study
also signifies the role of mutual fund industry in order to minimize
the risk of direct investments in the equity market.

OBJECTIVES

1. To study the dependence/independences of the demographic

factors (Gender and Age) of the investor and his/her risk
tolerance level.
2. To know the preferred investment avenues of the Indian
individual investor segregated in terms of financial literacy.
3. To know the risk tolerance level of the individual investor in
order to suggest a suitable investment portfolio.
4. To identify the preferred sources of information influencing
investment decisions.

SCOPE OF THE STUDY

The study is totally based on investor’s behavior and perception

about investments considering the current scenarios in the equity
market. The biggest concern with the service providers is the
quality maintenance on sale and after sale of financial products.
This research is on present market scenarios as it is supported by
latest data and the outcomes are taken as an input source in filling
up the gaps in SERVQUAL GAP model (Quality model) being
proposed to Destimoney Enterprise Pvt. Ltd.

RESEARCH METHODOLOGY

The methodology of data collection is based on primary as well as

secondary data. The following research methodology is proposed

81
to be adopted for the course of research to achieve the objective of
the study:

Primary Data
Primary research is an investigation which involves collection of
original data, using accepted research methodology. To understand
the investor’s demographics and investment strategies, research
will include
1. Questionnaires.
2. Semi structured interviews with agents and financial
advisors.

Secondary Data
The secondary data will be purely based on company sources,
financial reports, books & internet.

CONCLUSION

This study confirms the earlier findings with regard to the

relationship between gender and age, the risk tolerance level of
individual investors. The Present study has important implications
for investment managers as it has come out with certain interesting
facets of an individual investor. The individual investor still prefers
to invest in financial products which give risk free returns. This
confirms that Indian investors even if they are of high income, well
educated, salaried, independent are conservative investors prefer to
play safe. The investment product designers can design products
which can cater to the investors who are low risk tolerant and can
motivate investors to invest in mutual funds to eliminate equity
market risks.

82