ii

MAHATMA GANDHI UNIVERSITY

An Organistaion Study of India Infoline Limited

by Renjith R
Reg. No.31105

Submitted in partial fulfillment for the award of the degree of Master of Business Administration
(Marketing & HRM) CC308 under the guidence of

Mrs. Jincy K C

Department of Management Studies Sree Nikethan College Chathanoor

December 2009

Declaration
I, Renjith R, declare that this study report titled, 'An Organistaion Study of India Infoline Limited' submitted in partial fulfilment of requirements for the degree of Master of Business Administration is the record of of original project study conducted by me under the guidance of Ms. Jincy K J, Lecturer in Business Administration, Sree Nikethan College. This has not been submitted earlier for the award of any Degree/Diploma from M G University or any other university.

Signature Renjith R

Place: Date:

Acknowledgements
The satisfaction of the successful completion of any task wouldnt be complete without the expression of gratitude to the people who made it possible.This task would have been difcult for me if I had not received the support and encourage- ment from the people who have helped me from the inception to the completion of this project work.

I would also like to express my heart felt gratitude to Ms. Jincy K J, Head of the Department and Mr. Radhakrishnan, Principal of Sreenikathan College, who provided me with all help, guidance, co-operation and encouragement to complete my study.

I wish to express my sincere gratitude to the authorities of India Infoline ltd who has been kind enough to permit me to pursue this organization centered study at their esteemed organization. I wish to express my heart felt thanks to all staf of the organisation for their suggestions and guidance.

Then I would like to thank Mr. Ajesh Kumar, Branch Head of India Infoline Ltd, Kadakkal, who guided me at all stages through this project with plenty of data.

Finally I would like to thank God Almighty for being the guiding light in all my task and being with me through out this journey

RENJITH R

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Contents
1 Introduction 1.1 Objectives Of The Study . . . . . . . . . . . . . . . . . . . . . . . . 1.2 Scope of the study . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 Limitation Of The Study . . . . . . . . . . . . . . . . . . . . . . . . 4 4 1 3

2 Industry Profile 5 2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.2 Profile of The Financial Services Industry . . . . . . . . . . . . . . 6 2.3 Stock Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3 Company Profile 3.1 Milestones . . . . . . . . . . . . . . . . 3.2 Corporate Philosophy . . . . . . . . . . 3.3 Pillars Of The Organization . . . . . . 3.4 Company Structure . . . . . . . . . . . 3.5 Functioning Of Diferent Departments 4 Product Profile 4.1 Products & Sevices . . 4.2 Equities . . . . . . . . 4.3 Commodities . . . . . 4.4 Insurance . . . . . . . 4.5 Portfolio Management 4.6 Asset Management . . 4.7 Wealth Management . 16 17 19 21 25 29 35 35 35 37 39 40 41 41 43

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5 Analysis 5.1 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 6 Findings, Suggestions 6.1 Findings . . . . . . 6.2 Suggestions . . . . 6.3 Conclusion . . . . . Bibliography iii & Conclusion ........................... ........................... ...........................

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Chapter 1 Introduction
Every modern economy is based on a sound financial system. A financial system is a set of institutional arrangements through which financial surpluses are mobilized from the units generating surplus income and transferring them to the others in need of them. The activities which include production, distribution, exchange and holding of financial assets/instruments of diferent kinds by financial institutions, banks and other intermediaries of the market. Among these organizations are banks, credit card companies, insurance companies, consumer finance companies, stock brokerages, investment funds and some government sponsored enterprises. The financial markets have two major components; they are money market and capital market.

Money market
The Money Market refers to the market where borrowers and lenders exchange short-term funds to solve their liquidity needs.

Capital Market
The Capital Market is a market for financial investments that are direct or indirect claims to capital.

Chapter 1. Introduction

Securities Market
It refers to the markets for those financial instruments/claims/obligations that are commonly and readily transferable by sale. It has two inter-dependent and inseparable segments, the new issues (primary) market and the stock (secondary) market. The secondary market enables those who hold securities to adjust their holdings in response to changes in their assessment of risk and return. The Primary Markets provides the channel of sale of new securities.

India Infoline (IIFL)

India Infoline is one-stop financial services shop, most respected for quality of its advice, personalized service and cutting-edge technology. Listed on Bombay and National Stock Exchange with a net worth of INR 200 crore and a market cap of over INR 1970 crore. The company has a network of 976 business locations (branches and sub-brokers) spread across 365 cities and towns. It has more than 800,000 customers. It is registered with NSDL as well as CDSL as a depository participant, providing a onestop solution for clients trading in the equities mar- ketFirst Company in India to foray into the online distribution of Mutual Funds.

Stock Market
A stock market, or equity market, is a private or public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately. The size of the world stock market is estimated at about $36.6 trillion US at the beginning of October 2008. The total world derivatives market has been estimated at about $791 trillion face or nominal value,11 times the size of

Forex Market
The foreign exchange market (currency, forex, or FX) market is where currency trading takes place. It is where banks and other ofcial institutions facilitate the

Chapter 1. Introduction buying and selling of foreign currencies. The FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions.

Derivative Market
Derivatives are financial contracts, or financial instruments, whose values are derived from the value of something else (known as the underlying). The underlying on which a derivative is based can be an asset (e.g., commodities, equities (stocks), residential mortgages, commercial real estate, loans, bonds), an index (e.g., inter- est rates, exchange rates, stock market indices, consumer price index (CPI) see ination derivatives), or other items (e.g., weather conditions, or other derivatives). Credit derivatives are based on loans, bonds or other forms of credit Derivative is a product whose value is derived from the value of one or more basic variables. Underlying Asset can be Equity, Forex, commodity or any other asset.

Forwards A forward contract is a customized contract between two entities, where settlement takes place on a specific date in the future at todays pre-agreed price.

Futures A future is contract to buy or sell an underlying asset at a specified future date, at a specified price. These contracts are traded and settled on exchanges. Future contracts can be on individual scrip's or indices.

1.1

Objectives Of The Study

To understand the organizational structure or hierarchy of the company To enable us to gain an insight in to the corporate world.

Chapter 1. Introduction

The study is aimed at understanding how an organization practically works

in the real situation.

To study what kind of changes the organization has undergone in the recent
past or have initiated recently.

To find out the competative position of India infoline

1.2 Scope of the study

This report is based on the study conducted at the burdubai branch, UAE 1.It aims at understanding the companys establishment organization structure, departments,marketing strategies and the advantages it is having over the competitors.

1.It aims to understand the skills of the company in the areas like technological advancement, competitions and in management

1.3

Limitation Of The Study

Time limit is a major constraint. As per the company rules many information was not disclosed. Finding and conclusions made are based on the superficial knowledge As the managers are busy in their duty schedules it is not possible for us to
spend more time in interaction and discussion with them.

Chapter 2 Industry Profile

2.1

Introduction

Financial services are vital tools of machinery for economy and they lubricate the wheels of economic development. Indian economy has undergone a sea change in its structure; policy and regulation, due to liberalization and globalization, since 1991. The financial service sector is considered as the sunrise sector due to increasing growth and contribution towards the GDP of India. Once the economy crosses the subsistence level, financial services become more prominent and important to that economy. Financial services in current days are emerging as a crucial industry world over and are termed as a sun rise industry. The services ofered by this sector not only raise the required funds, but also lead to the efcient management of funds. Today, the financial service products, as turned out to by financial services industry are innovative and paving ways for vivid opportunities for further economic development. With market sentiment turning positive due to the formation of a stable newly elected government, the ripple efect is likely to felt across all the financial services in India. The sectors, including banking and insurance, and mutual funds are all beginning to reap the benefits of a good closure for 2008-09. In 2008-09, the Indian economy is estimated to have grown by 6.7 per cent. According to the latest Central Statistical Organization (CSO) data, financial services and real estate sector rose by 9.5 per cent in the first quarter of 2009-10.

Chapter 2. Industry profile

2.2

Profile of The Financial Services Industry

A financial market is a market in which financial assets (securities) can be purchased or sold. Financial markets facilitate financing and investing by house- holds, firms, and government agencies Participants that provide funds are called surplus units.And Participants that enter markets to obtain funds are deficit units.Financial markets can be distinguished by the maturity structure and trading structure of its securities. Financial services like banking, merchant banking, factoring, Insurance, Venture capital, act as vital machinery of an economy. These financial services that fa- cilitate financial transactions of individuals and institutional services resulting in their resources allocation activities through time. The sector that deals with such financial services is known as financial services sector. The Three pillars of Financial System are:

Banking Insurance and Mutual Funds Online Trading

Financial system acts as an intermediary

World Scenario
The first publicly issued security can be traced back to the fourteenth century in Venice where the government made the first known issue of bonds. Merchants and landowners as investments purchased these government securities. The need for stock exchanges developed out of early trading activities in agricultural and other commodities. In and around 1750s in England, traders in the shares of early companies would commonly meet in Jonathans Cofee House to trade shares and make business deals. Early share bids and ofers were written on the Cofee House walls and the trading process was highly unregulated, with insider trading forming the basis for most investment decisions. By 1773, Trading Clubs had formed, and in 1801 a group of traders raised 20,000 pounds to build the London Stock Exchange in Capel Court. A similar process was occurring in America. By

Chapter 2. Industry profile the early 1790s many merchants had begun trading shares. Just as in London, these early traders often met at cofeehouses in an informal environment. In 1792, 24 Merchants and Brokers paid $400 each for a "trading seat" and signed the Buttonwood Tree Agreement, who decided to act as agents for other persons and give preference to each other in their negotiations. They did much of their trading under a tree at what is

now 68 Wall Street. This agreement outlined the regulations under which shares Could be bought and sold. These regulations formed the basis for trading rules that still exist today and led to the formation in 1817 of the New York Stock Exchange (NYSE). Today, nearly three thousand companies from all over the world trade their stocks valued at trillions of dollars here. At that time, many stocks that were deemed not well enough for the New York Stock Exchange (NYSE) were traded outside on the curbs. This, so called curb trading has now become the American Stock Exchange (AMEX). Today much water has passed under the bridge since then and we forward all the way to late 1990s. By late 1990s, most of the stock exchanges had been automated, and the open outcry method of trading was the thing of the past. Most stock exchanges began to use computers to replace oor traders. Floor traders take phone and computer orders from brokers, and negotiate a trade with stock specialists at trading stations on the trading oor. The internet orders placed by clients are first processed and authorized through the stock brokers computer system before being automatically placed on the stock exchanges computer systems. This period saw the rise in popularity and acceptance of online stock broking.

Financial Institutions
A financial institution is an institution that provides financial services for its clients or members.Which transform financial assets acquired through the market and constitute them into a diferent, and more widely preferable, type of asset-which becomes their liability. This is the function performed by financial intermediaries, the most important type of financial institution. Financial institutions are to exchange financial assets on behalf of customers. These firms also assist in the creation of financial assets for their customers, and then selling those financial assets to other market participants. They provide investment advice to other market participants and manage the portfolios of other market participants.

Chapter 2. Industry profile

Major players in the Industry

Banks Stock Brokerage Firms Non Banking Financial Institutions Building Societies Asset Management Firms Credit Unions Insurance Companies
Functions Of Financial Institutions
Financial institutions ofer various types of transformation services

Liability-Asset transformation
They issue claims to their customers that have characteristics diferent from those of their own assets. For example, banks accept deposits as liability and convert them into assets such as loans.

Size- transformation
They choose and manage portfolios whose risk and return they alter by applying resources to acquire better information and to reduce or overcome transaction costs. They provide large volumes of finance on the basis of small deposits or unit capital.

Risk transformation
They distribute risk through diversification and thereby reduce it for savers as in the case of mutual funds.

Chapter 2. Industry profile

Maturity transformation
They ofer savers alternate forms of deposits according to their liquidity preferences, and provide borrowers with loans of requisite maturities.

Importance of Financial Institutions

Financial intermediaries convert the money given by savers to investment by borrowers, such as banks, UTI, NBFIs, etc. Non-intermediaries give loans but do not collect deposits or funds from savers. Regulators watch the markets, players and modes of transactions. Regulators design the market system, create and enforce regulations and rules for the market.

Figure 2.1: Classification of Financial Institutions-An Indian Perspective

Chapter 2. Industry profile Financial intermediaries are a special group of financial institutions that obtain

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funds by issuing claims to market participants and use these funds to purchase financial assets. Intermediaries transform funds they acquire into assets that are more attractive to the public. By doing so, financial intermediaries do one or more of the following:

Provide maturity intermediation Provide risk reduction via diversification at lower cost Reduce the cost of contracting and information processing Provide a payments mechanism.
2.3 Stock Market

A stock market or equity market is a public market (a loose network of economic transactions, not a physical facility or discrete entity) for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately. The size of the world stock market was estimated at about $36.6 trillion US at the beginning of October 2008. The total world derivatives market has been estimated at about $791 trillion face or nominal value,11 times the size of the entire world economy.The value of the derivatives market, because it is stated in terms of notional values, cannot be directly compared to a stock or a fixed income security, which traditionally refers to an actual value. Moreover, the vast majority of derivatives 'cancel' each other out (i.e., a derivative 'bet' on an event occurring is ofset by a comparable derivative 'bet' on the event not occurring). Many such relatively illiquid securities are valued as marked to model, rather than an actual market price. The stocks are listed and traded on stock exchanges which are entities of a corporation or mutual organization specialized in the business of bringing buyers and sellers of the organizations to a listing of stocks and securities together. The largest stock market in the United States, by market cap is the New York Stock Exchange, NYSE, while in Canada, it is the Toronto Stock Exchange. Major European ex- amples of stock exchanges include the London Stock Exchange, Paris Bourse, and

Chapter 2. Industry profile the Deutsche Brse. Asian examples include the Tokyo Stock Exchange, the Hong Kong Stock Exchange, the Shanghai Stock Exchange, and the Bombay Stock Exchange. In Latin America, there are such exchanges as the BM&F Bovespa and the BMV.

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Function and purpose of Stock Market

The stock market is one of the most important sources for companies to raise money. This allows businesses to be publicly traded, or raise additional capital for expansion by selling shares of ownership of the company in a public market. The liquidity that an exchange provides afords investors the ability to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments such as real estate. History has shown that the price of shares and other assets is an important part of the dynamics of economic activity, and can inuence or be an indicator of so- cial mood. An economy where the stock market is on the rise is considered to be an up-andcoming economy. In fact, the stock market is often considered the primary indicator of a country's economic strength and development. Rising share prices, for instance, tend to be associated with increased business investment and vice versa. Share prices also afect the wealth of households and their consump- tion. Therefore, central banks tend to keep an eye on the control and behavior of the stock market and, in general, on the smooth operation of financial system functions. Financial stability is the raison d'tre of central banks. Exchanges also act as the clearinghouse for each transaction, meaning that they collect and deliver the shares, and guarantee payment to the seller of a security. This eliminates the risk to an individual buyer or seller that the counterparty could default on the transaction. The smooth functioning of all these activities facilitates economic growth in that lower costs and enterprise risks promote the production of goods and services as well as employment. In this way the financial system contributes to increased prosperity. An important aspect of modern financial markets, however, including the stock markets, is absolute discretion. For example, American stock markets see more unrestrained acceptance of any firm than in smaller markets. For exam- ple, Chinese firms that possess little or no perceived value to American society

Chapter 2. Industry profile profit American bankers on Wall Street, as they reap large commissions from the placement, as well as the Chinese company which yields funds to invest in China. However, these companies accrue no intrinsic value to the long-term stability of the

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American economy, but rather only short-term profits to American business men and the Chinese; although, when the foreign company has a presence in the new market, this can benefit the market's citizens. Conversely, there are very few large foreign corporations listed on the Toronto Stock Exchange TSX, Canada's largest stock exchange. This discretion has insulated Canada to some degree to worldwide financial conditions. In order for the stock markets to truly facilitate economic growth via lower costs and better employment, great attention must be given to the foreign participants being allowed in.

Stock Broking
A stock broker is a professional who buys and sells stocks and other securities in the stock market through the book makers from the stock investors. As per the law in United States one needs to pass the General Securities Representative Examination or the Series 7 exam for working as a stock broker. Brokers provide diferent types of services to their clients. Basic services provided by the stock market brokers are,

Execution only
In this service the broker only carries out the trading according to the direction of the investor. This is the basic and the most commonly used service of the brokers.

Advisory dealing
In this service the broker not only performs the buying and selling instructions of the client but also advises the investor about which stock to buy and which stock to sell.

Chapter 2. Industry profile

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Discretionary dealing
This is the most comprehensive service that a broker provides. In this case the broker has the discretionary power to take the investment decisions on behalf of the investor.

Indian Brokerage Industry

The Indian broking industry is one of the oldest trading industries that have been around even before the establishment of the BSE in 1875. Despite passing through a number of changes in the post liberalization period, the industry has found its way towards sustainable growth.

Figure 2.2: Income of stock market Industry in India

Share trading in India is undergoing a transition and consolidation phase witnessed never before. The competition is likely to become so severe after the entry of many players, retaining a customer is most difcult practice for any service provider. Though India has a very big untapped market but the players will not ourish unless they change the way the customers are being served. Given the awareness level of today customers every player has to treat with care and make the customer feel that he is the king. Number of Online Share trader in India has crossed the

Chapter 2. Industry profile line. More and more customers are coming under this umbrella and many of the existing one are changing pavilion. So customer retention and satisfaction is now more important as it was never before. Players keep coming with new schemes in order to attract new customers and retain the existing one. This is being supplemented with increased advertising and brand building eforts. Success of any organization depends

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upon its being proactive. An often quoted marketing adage is to manage a business well is to manage its future and to manage its future is to manage information. The securities market has essentially three categories of participants, viz., the issuer of securities, the investors in the securities and the intermediaries. The issuers are the borrowers or deficit savers, who issue securities to raise funds. The investors, who are surplus savers, deploy their savings by subscribing to these securities. The intermediaries are the agents who match the needs of users and suppliers of funds for a commission. These intermediaries function to help both the issuers and investors to achieve their respective goals. There are large variety and number of intermediaries providing various services in the Indian securities market. Need for a broker As per SEBI (Securities and Exchange Board of India.) regulations, only registered members can operate in the stock market. One can trade by executing a deal only through a registered broker of a recognised Stock Exchange or through a SEBIregistered sub-broker. The financials and investment industry is a highly competitive in nature with almost well established firms diversifying and entering into this industry. As of today there are Over 2000 brokers, 10000 sub brokers and 1 core investors. It is highly Competitive with entry of new aggressive players. Retail broking is highly fragmented industry with falling brokerages value added services and online trading, the new fad

Main players in the Indian brokerage industry

India Infoline ICICI Direct Angel Broking Can Money

Chapter 2. Industry profile

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Geojit HDFC Securities Kotak Securities Relaince Money Religare Share Khan Artha Money Way to Wealth SBI Demat Bridge securities Ltd. Mothilal Oswal Anand Rati Citi Bank Demat Dautche Bank Frankfin Karvy securities Appolo sindhuri Bangalore stock excgange

Chapter 3 Company Profile

Introduction
The India Infoline group, comprising the holding company, india infoline limited and its wholly-owned subsidiaries, straddle the entire financial services space with oferings ranging from equity research, equities and derivatives trading, com- modities trading, portfolio management services, mutual funds, life insurance, fixed deposits, goi bonds and other small savings instruments to loan products and investment banking. India Infoline also owns and manages the websites www.indiainfoline.com and www.5paisa.com the company has a network of over 2100 business locations (branches and sub-brokers) spread across more than 450 cities and towns. the group caters to approximately a million customers. The India Infoline group were founded in 1995 by Mr. Nirmal Jain (Chairman and Managing Director) as an independent business research and information provider. Then gradually evolved into a one-stop financial services solutions provider. The strong management team comprises competent and dedicated professionals Now they are a pan-India financial services organization across 1,361 business locations and a presence in 428 cities.Their global footprint extends across ge- ographies with ofces in New York, Singapore and Dubai. We are listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). They now ofer a wide range of services and products comprising broking (retail and institutional equities and commodities), wealth management, credit and fi- nance, insurance, asset management and investment banking. The India Infoline 16

Chapter 3. Company profile group registered with the BSE and the NSE for securities trading, MCX, NCDEX

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and DGCX for commodities trading, CDSL and NSDL as depository participants. We are registered as a Category I merchant banker and are a SEBI registered portfolio manager. We also received the FII license in IIFL Inc. IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to carry out corporate advisory and dealing in securities operations. Two subsidiaries India Infoline Investment Services and Moneyline Credit Limited are registered with RBI as non-deposit taking non-banking financial services companies. India info- line Housing Finance Ltd, the housing finance arm, is registered with the National Housing Bank. India Infoline originally incorporated on October 18, 1995 as PROBITY RESEARCH AND SERVICES PVT LTD. at Mumbai under the Companies Act,1956 with Registration No. 1193797.and became a public limited company on April 28, 2000. The name of the Company was changed to India Infoline.com Limited on May 23, 2000 and later to India Infoline Limited on March 23, 2001. It is the first Company in India to foray into the online distribution of Mutual Funds

3.1

Milestones

It is a one-stop financial services shop, most respected for quality of its advice, personalized service and cutting-edge technology. The No.1Corporate agent for ICICI Prudential Life Insurance Company. Research acknowledged by Forbes as Must Read for investor in South AsiaListed on Bombay and National Stock Exchange with a net worth of INR 200 crore and a market cap of over INR 1970 crore.

1995
Incorporated as an equity research and consulting firm with a client base that included leading FIIs, banks, consulting firms and corporates.

Chapter 3. Company profile

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1999
Restructured the business model to embrace the internet; launched archives.indiainfoline.com mobilised capital from reputed private equity investors.

2000
Commenced the distribution of personal financial products; launched online equity trading; entered life insurance distribution as a corporate agent. Acknowledged by Forbes as Best of the Web and ...must read for investors.

2004
Acquired commodities broking license; launched Portfolio Management Service. 2005 Listed on the Indian stock markets.

2006
Acquired membership of DGCX; launched investment banking services.

2007
Launched a proprietary trading platform; inducted an institutional equities team; formed a Singapore subsidiary; raised over USD 300 mn in the group; launched consumer finance business under the Moneyline brand.

2008
Launched wealth management services under the IIFL Wealth brand; set up India Infoline Private Equity fund; received the Insurance broking license from IRDA; received the venture capital license; received inprinciple approval to sponsor a mutual fund; received Best broker- India award from FinanceAsia; Most Improved Brokerage- India award from Asiamoney.

Chapter 3. Company profile

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2009
Received registration for a housing finance company from the National Housing Bank; received Fastest growing Equity Broking House - Large firms in India by Dun & Bradstreet.

2010
Received in-principle approvel for the membership of the singappore stock exchange, received membership of Colombo stock exchange.

3.2

Corporate Philosophy

People Organization
It is rightly said about the services sector that our most prized assets go down the elevator at the end of every day. Being in the services industry, people are their biggest and most important assets. They believe that people make all the diference.

Unique Approach of India Infoline Ltd.

India Infoline Ltd. is a one-stop financial centre. They follow a unique approach; incorporating innovation, finance, growth, thought leadership, partnership and diversification. This approach is diagramatically represented in Figure 3.1.

Owner Mindset
What distinguishes India Infoline from other organizations is the fact that all employees are driven by Owner Mindset. This is a privilege as well as a responsibility. They think and behave like one. While there is no the way of doing things, there are millions of things which an owner would do diferently as compared to a typi- cal person with an employee mindset. We believe in the Olympic motto and have made it our principle for the coming year. We have been preparing to move into a new orbit of growth for several years now. We believe that the real growth has yet not happened. Each member of Team India Infoline has been putting up an Olympian fight and is capable, confident, and certain and ready to deliver faster, higher and stronger performance.

Chapter 3. Company profile

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Figure 3.1: Unique Approach of India Infoline Ltd

Vision Statement
"Our vision is to be the most respected company in the financial services space"

Mission
"To become a full-edged financial services company known for its quality of advice, personalized services and cutting edge technology"

Chapter 3. Company profile

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3.3

Pillars Of The Organization

Figure 3.2: Organisational structure of India infoline Ltd

Chapter 3. Company profile Mr. Nirmal Jain Chairman & Managing Director Nirmal Jain, MBA (IIM, Ahmedabad) and a Chartered and Cost Accountant,

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founded Indias leading financial services company India Infoline Ltd. in 1995, pro- viding globally acclaimed financial services in equities and commodities broking, life insurance and mutual funds distribution, among others. Mr. Jain began his career in 1989 with Hindustan Levers commodity export business, contributing tremendously to its growth. He was also associated with Inquire-Indian Equity Research, which he co-founded in 1994 to set new standards in equity research in India.

Mr. R Venkataraman Executive Director R Venkataraman, co-promoter and Executive Director of India Infoline Ltd., is a B. Tech (Electronics and Electrical Communications Engineering, IIT Kharagpur) and an MBA (IIM Bangalore). He joined the India Infoline board in July 1999. He previously held senior managerial positions in ICICI Limited, including ICICI Securities Limited, their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited. He was also Assistant Vice President with G E Capital Services India Limited in their private equity division, possessing a varied experience of more than 16 years in the financial services sector.

The Board of Directors

Mr Nilesh Vikamsey Independent Director Mr. Vikamsey, Board member since February 2005 - a practising Chartered Accountant and partner (Khimji Kunverji & Co., Chartered Accountants), a member firm of HLB International, headed the audit department till 1990 and thereafter also handles financial services, consultancy, investigations, mergers and acqui- sitions, valuations etc; an ICAI study group member for Proposed Accounting Standard 30 on Financial Instruments Recognition and Management, Finance

Chapter 3. Company profile Committee of The Chamber of Tax Consultants (CTC), Law Review, Reforms and Rationalization Committee and Infotainment and Media Committee of Indian Merchants Chamber (IMC) and Insurance Committee and Legal Afairs Commit- tee of Bombay Chamber of Commerce and Industry (BCCI). Mr. Vikamsey is a director of

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Miloni Consultants Private Limited, HLB Technologies (Mumbai) Private Limited and Chairman of HLB India.

Mr Sat Pal Khattar Non Executive Director Mr Sat Pal Khattar, - Board member since April 2001 - Presidential Council of Minority Rights member, Chairman of the Board of Trustee of Singapore Business Federation, is also a life trustee of SINDA, a non profit body, helping the underprivileged Indians in Singapore. He joined the India Infoline board in April 2001. Mr Khattar is a Director of public and private companies in Singapore, India and Hong Kong; Chairman of Guocoland Limited listed in Singapore and its parent Guoco Group Ltd listed in Hong Kong, a leading property company of Singapore, China and Malaysia. A Board member of India Infoline Ltd, Gateway Distriparks Ltd both listed and a number of other companies he is also the Chairman of the Khattar Holding Group of Companies with investments in Singapore, India, UK and across the world.

Mr Kranti Sinha Independent Director Mr. Kranti Sinha Board member since January 2005 completed his masters from the Agra University and started his career as a Class I ofcer with Life Insurance Corporation of India. He served as the Director and Chief Executive of LIC Hous- ing Finance Limited from August 1998 to December 2002 and concurrently as the Managing Director of LICHFL Care Homes (a wholly owned subsidiary of LIC Housing Finance Limited). He retired from the permanent cadre of the Executive Director of LIC; served as the Deputy President of the Governing Council of In- surance Institute of India and as a member of the Governing Council of National Insurance Academy, Pune apart from various other such bodies. Mr. Sinha is also on the Board of Directors of Hindustan Motors Limited, Larsen & Toubro

Chapter 3. Company profile Limited, LICHFL Care Homes Limited, Gremach Infrastructure Equipments and Projects Limited and Cinemax (India) Limited.

24

Mr Arun K. Purvar Independent Director Mr. A.K. Purvar Board member since March 2008 completed his Masters degree in commerce from Allahabad University in 1966 and a diploma in Business Administration in 1967. Mr. Purwar joined the State Bank of India as a pro- bationary ofcer in 1968, where he held several important and critical positions in retail, corporate and international banking, covering almost the entire range of commercial banking operations in his illustrious career. He also played a key role in co-coordinating the work for the Bank's entry into the field of insurance. After retiring from the Bank at end May 2006, Mr. Purwar is now working as Member of Board of Governors of IIM-Lucknow, joined IIMIndore as a visiting professor, joined as a Hon.-Professor in NMIMS and he is also a member of Advisory Board for Institute of Indian Economic Studies (IIES), Waseda University, Tokyo, Japan. He has now taken over as Chairman of IndiaVenture Advisors Pvt. Ltd., as well as IL & FS Renewable Energy Limited. He is also working as Independent Direc- tor in leading companies in Telecom, Steel, Textiles, Autoparts, Engineering and Consultancy.

Committee
Audit Committee
The Audit committee comprises Mr Nilesh Vikamsey, Chairman of the Committee, Mr Sat Pal Khattar, Mr Sanjiv Ahuja and Mr Kranti Sinha, three of whom are independent Directors. The Managing Director, the Executive Director along with the Statutory and Internal Auditors are invitees to the Meeting. The Terms of reference of this committee are as under: - To investigate into any matter that may be prescribed under the provisions of Section 292A of The Companies Act, 1956 - Recommendation and removal of External Auditor and fixation of the Audit Fees. - Reviewing with the management the financial statements before submission of the same to the Board. Overseeing of Companys financial reporting process and

Chapter 3. Company profile disclosure of its financial information. - Reviewing the Adequacy of the Internal Audit Function.

25

Compensation/ Remuneration Committee

The Compensation / Remuneration Committee comprises Mr Sanjiv Ahuja, Chairman of the Committee, Mr Nilesh Vikamsey and Mr Kranti Sinha, all of whom are independent Directors. The Terms of reference of this committee are as un- der: - To fix suitable remuneration package of all the Executive Directors and Non Executive Directors, Senior Employees and ofcers i.e. Salary, perquisites, bonuses, stock options, pensions etc. - Determination of the fixed component and performance linked incentives alongwith the performance criteria to all employees of the company - Service Contracts, Notice Period, Severance Fees of Directors and employees. - Stock Option details: whether to be issued at discount as well as the period over which to be accrued and over which exercisable. - To conduct discussions with the HR department and form suitable remuneration policies.

Share Transfer and Investor Grievance Committee

Details of the Members, Compliance Ofcer, No of Complaints received and pending and pending transfers as on close of the financial year. The committee func- tions under the Chairmanship of Mr Kranti Sinha, a Non-executive independent Director. The other Members of the committee are Mr Sanjiv Ahuja, Indepen- dent Director and Mr R Venkataraman, Executive Director. Ms Komal Parikh, Company Secretary is the Compliance Ofcer of the Company.

3.4

Company Structure

India Infoline Limited is listed on both the leading stock exchanges in India, viz. the Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges. It is engaged in the businesses of Equities broking, Wealth Advisory Services and Portfolio Management Services. It ofers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE. It is registered with NSDL as well as CDSL as

Chapter 3. Company profile a depository participant, providing a one-stop solution for clients trading in the

26

equities market. It has recently launched its Investment banking and Institutional Broking business. A SEBI authorized Portfolio Manager; it ofers Portfolio Management Services to clients. These services are ofered to clients as diferent schemes, which are based on difering investment strategies made to reect the varied risk-return preferences of clients.

Figure 3.3: Corporate structure of India Infoline Ltd

India Infoline Media and Research Services Limited

The content services represent a strong support that drives the broking, commodities, mutual fund and portfolio management services businesses. Revenue generation is through the sale of content to financial and media houses, Indian as well as global. It undertakes equities research which is acknowledged by none other than Forbes as 'Best of the Web' and 'a must read for investors in Asia'. India Infoline's research is available not just over the internet but also on interna- tional wire services like Bloomberg (Code: IILL), Thomson First Call and Internet Securities where India Infoline is amongst the most read Indian brokers.

Chapter 3. Company profile

27

India Infoline Commodities Limited

India Infoline Commodities Pvt Limited is engaged in the business of commodities broking. Our experience in securities broking empowered us with the requisite skills and technologies to allow us ofer commodities broking as a contra-cyclical al- ternative to equities broking. We enjoy memberships with the MCX and NCDEX, two leading Indian commodities exchanges, and recently acquired membership of DGCX. We have a multichannel delivery model, making it among the select few to ofer online as well as oine trading facilities.

India Infoline Marketing & Services

India Infoline Marketing and Services Limited is the holding company of India Infoline Insurance Services Limited and India

India Infoline Insurance Services India Infoline Insurance Services Limited is a registered Corporate Agent with the Insurance Regulatory and Development Authority (IRDA). It is the largest Corporate Agent for ICICI Prudential Life Insurance Co Limited, which is India's largest private Life Insurance Company. India Infoline was the first corporate agent to get licensed by IRDA in early 2001.

India Infoline Insurance Brokers Limited India Infoline Insurance Brokers Limited is a newly formed subsidiary which will carry out the business of Insurance broking. We have applied to IRDA for the insurance broking licence and the clearance for the same is awaited. Post the grant of license, we propose to also commence the general insurance distribution business.

Chapter 3. Company profile

28

India Infoline Investment Services Limited

Consolidated shareholdings of all the subsidiary companies engaged in loans and financing activities under one subsidiary. Recently, Orient Global, a Singapore- based investment institution invested USD 76.7 million for a 22.5% stake in India Infoline Investment Services. This will help focused expansion and capital raising in the said subsidiaries for various lending businesses like loans against securities, SME financing, distribution of retail loan products, consumer finance business and housing finance business. India Infoline Investment Services Private Limited consists of the following step-down subsidiaries.

India Infoline Distribution Company Limited (distribution of retail loan

products)

Moneyline Credit Limited (consumer finance) India Infoline Housing Finance Limited (housing finance)
IIFL (Asia) Pte Limited
IIFL (Asia) Pte Limited is wholly owned subsidiary which has been incorporated in Singapore to pursue financial sector activities in other Asian markets. Further to obtaining the necessary regulatory approvals, the company has been initially capitalized at 1 million Singapore dollars. IIFL (Asia) Pte Limited is wholly owned subsidiary which has been incorporated in Singapore to pursue financial sector activities in other Asian markets. Further to obtaining the necessary regulatory approvals, the company has been initially capitalized at 1 million Singapore dollars.

India Infoline.com Distribution Services Ltd

They have developed a retail distribution infrastructure (Investor Points) to support our online presence. This network, spread over 60 locations, is engaged in the distribution of financial products including fixed deposits, GoI Relief bonds, insurance, mutual funds and IPO's. These Investor Points help us service our broking customers also.

Chapter 3. Company profile

29

Money Tree Consultancy Services

(MTCS) Is a group company of India Infoline Ltd., focusing distribution on Home Loans, Personal Loans, Credit Cards and Non Life Insurance. MTCS extends the distribution reach of financial services providers by using alternate channels like the Internet, telephone, wireless, sales force and events.

3.5

Functioning Of Diferent Departments

India Infoline has a various functional departments like other service and manufacturing companies there are some basic and very important departments in this company also which functions with high degree of accuracy and efciency. The main departments are,

Finance & Operations Marketing & Sales Human Resource Management (HRM) Advisory Departments Collection and Verification Department
Finance & Operations
Finance & Operation department is one of the most important departments in the organization from which overall performance of the company can be measured and changed. In India Infoline Ltd, this important department is headed by a dynamic Executive Director (shown in the Figure 3.1) A SEBI authorized Portfolio Manager; it ofers Portfolio Management Services to clients. These services are ofered to clients as diferent schemes, which are based on difering investment strategies made to reect the varied risk-return preferences of clients.

Sourcing of finance: This has been done by issuing shares to the institutional as well as retail investors.

Chapter 3. Company profile

30

Figure 3.4: Structure of Finance and Operation Department

Tax planning: Even though tax planning was good by the company experts, the payment of tax has considerably increased due to increased net profit before tax.

Records Maintaining all the financial records of the transactions

Reporting to management about financial performance: Every quarter the financial reports which include mainly Balance Sheet and Profit & Loss accounts are submitted to top management for various decision making purpose.

Dividend decision making: As the financial performance of the company was very good, high amount of dividend per share was given to the shareholders.

Chapter 3. Company profile Communication with regulatory bodys: Reporting to SEBI, RBI and other regulatory bodies about the financial condition

31

of the company. All the financial institutions & NBFCs should report to the SEBI about the financial condition and performance of the company for various regulatory compliances.

Maintaining the relationship with all the shareholders. This is also one of the main functions as keeping all shareholders happy is very important for long term support in the form of finance and ownership. Financial results are very good as observed since its inception. This is done through efective cost cutting measures, good financial planning and budgeting.

Operations:
This is one of the most critical sub-department which decides all policies and procedures for the company. It also sets the objectives and goals for the company. It measures the overall performance of the company with the set standards. It is in this department overall strategic policies are made. It sets the rules and regulations to control the operations of all the branches all over India.

Marketing Strategy Of India Infoline

India Infoline focus on the consumers who prefer almost all investment activities at same place by providing number of various financial services. At India Infoline a person can purchase or sell shares, debentures etc. and at the same place also demat it. India Infoline 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 India Infoline provides comfort to its customers.

Chapter 3. Company profile

32

Market Share
From the study of CMIE database it can be seen that second highest market share

Figure 3.5: Perecntage Market share of India infoline Ltd

is carried by India Infoline Ltd. India Infoline uses demographic segmentation strategy and segment people based on their occupation. India Infoline uses se- lective specialization strategy for market targeting. Target person for the India Infoline Stock Broking and India Infoline Investment Service are persons who can work as sub-broker for the companies. Companies focus on Advisors of Insurance and post ofce, Tax consultants and CAs for making sub-broker. India Infoline uses one level marketing channel for investment product distribution. Sub-brokers work as intermediary between consumer and company. Company has both forward and backward ow 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. India Infoline provides training to the sub-brokers because they will be viewed as the company by the investors. The executives of India Infoline explain various new schemes of investment to the sub-brokers with its objective, risk factors and expected return. Company also periodically arrange seminar to guide sub-brokers. The objective of advertising of India Infoline is to create awareness about services of India Infoline among investors and sub-brokers. India Infoline also publishes its weekly Stock Market Newsletter Market Mantra.

Chapter 3. Company profile

33

Human Resource Management

HRM is the planning, organizing, directing, and controlling of the procurement, development, compensation, integration and maintenance of people for the purpose of contributing to organizational, individual and social goals. This department has played a vital role directly and indirectly in contributing for the good performance of the company since its inception. Some of the main functions of this department which played vital role in India Infoline Ltd are:

Selecting high quality people with great ability and proper attitude Training & development of people in various areas. Motivating by announcing various incentives for performance Recruiting large number of self-motivated sales people
Advisory Department
Basically India Infoline Ltd have following types of services division. They are:

Mutual Fund Advisory Services Division. Portfolio Management Services (PMS) Division. IPO Advisory & Distribution Services Division. Insurance Services Division. NRI Service Division.
Collection & Verification
This department plays a good role in verifying all the documents of the customers to avail the products and services in this company. There are many documents which are franked due to the regulations of SEBI and there are other documents

Chapter 3. Company profile like PAN card, address proof, bank statements etc which should be properly ver-

34

ified and documented for mistakes and duplicity of the documents. If the docu- ments are found to be with mistakes they are immediately sent back to sales ofce to get all the correct documents from the customers. If the documents are found to be correct with all respects, the customers are given relevant ID, passwords and other things which are required to access the products and services of the company according to the regulations of SEBI.

Chapter 4 Product Profile

4.1

Products & Sevices

India Infoline Ltd. is a one-stop financial services shop, most respected for quality of its advice, personalised service and cutting-edge technology.They provide a wide range of financial products and services like equities, Insurances, commodities, Investments etc. They can be broadly catagorised into,

EQUITY MUTUAL FUND INSURANCE COMMODITIES PMS DERIVATIVES

4.2 Equities

India Infoline provided the prospect of researched investing to its clients, which was hitherto restricted only to the institutions. Research for the retail investor did not exist prior to India Infoline. India Infoline leveraged technology to bring the 35

Chapter 4. Product Profile convenience of trading to the investors location of preference (residence or ofce) through computerized access. India Infoline made it possible for clients to view transaction costs and ledger updates in real time. Over the last five years, India Infoline sharpened its competitive edge through the following initiatives:

36

Multi-channel delivery model The Company is among the few financial intermediaries in India to ofer a complement of online and oine broking. The Companies network of branches also allows customers to place orders on phone or visit our branches for trading.

Integrated middle and back ofce The customer can trade on the BSE and NSE, in the cash as well as the derivatives segment all through the available multiple options of Internet, phone or branch presence.

Multiple-trading options The Company harnessed technology to ofer services at among the lowest rates in the business.

Membership The Company widened client reach in trading on the domestic and international exchanges.

Technology The Company provides a prudent mix of proprietary and outsourced technologies, which facilitate business growth without a corresponding increase in costs.

Chapter 4. Product Profile Content The Company has leveraged its research capability to provide regular updates and investment picks across the short and long-term.

37

Service Clients can access the customer service team through various media like toll-free lines, emails and Internet- messenger chat for instant query resolution. The Com- panies customer service executives proactively contact customers to inform them of key changes and initiatives taken by the Company. Business World rated the Companies customer service as Best in their survey of online trading sites carried out in December 2003.

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock
Exchange

Registered with the NSDL as well as CDSL as a depository participant,

providing a one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments, online as well as oine. Presence across 350 cities and towns with a network of over 850 business
locations Equity client base of over 500,000 clients

Provision of free and world-class research to all clients.

4.3 Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge as a one stop solutions financial intermediary. Its experience in secu- rities broking has empowered it with requisite skills and technologies. Increased ofering: The Companies commodities business provides a contra-cyclical alterna- tive to equities broking. The Company was among the first to ofer the facility of commodities trading in Indias young commodities market (the MCX commenced

Chapter 4. Product Profile operations only in 2003). Average monthly turnover on the commodity exchanges

38

increased from Rs 0.34 bn to Rs 20.02 bn. The commodities market has several products with diferent and non-correlated cycles. On the whole, the business is fairly insulated against cyclical gyrations in the business. India Infoline distinguished its business through the interplay of knowledge and technology:

Complete solution The Company provides a complete - advice to execution solution facilitated by information and advice on likely commodity trends in the Indian and international environment.

Technology The Company has extended the trading terminal to the investors home/workplace reinforced with real-time commodity information and ledger position.

Rates The Company harnessed technology to ofer services at among the lowest rates in the business. Membership: The Company widened client reach in trading on the domestic and international exchanges.

Key features

Enjoys memberships with the MCX and NCDEX, two leading Indian commodities exchanges

Recently acquired membership of the DGCX Multi-channel delivery model, making it among the select few to ofer online
as well as oine trading facilities

Extended commodity trading to retail investors, among the few Indian financial intermediaries to do so

Chapter 4. Product Profile

39

Online business at 80 Provides regular commodity updates pertaining to the Indian and international environment

4.4

Insurance

An entry into this segment helped complete the client's product basket; concurrently, it graduated the Company into a one stop retail financial solutions provider. To ensure maximum reach to customers across India, we have employed a multi pronged approach and reach out to customers via our Network, Direct and Afliate channels. Following the opening of the sector in 1999-2000, a number of private sector insurance service providers commenced operations aggressively and helped grow the market. The Companies entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues. The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy. Over the last five years, India Infoline sharpened its competitive edge in this business segment through the following initiatives:

Client base Grew its 40,000 strong client base through knowledge-led analysis, translating into an attractive opportunity to cross-sell products and generate referral business.

Distribution network Invested in a distribution network of 177 branches across 19 states, which provided it with an unmatched reach within its segment.

Chapter 4. Product Profile Hands-on training Invested aggressively in training its field force more than 100 hours a year in product attributes across the insurance sector - highlighting various product details and marketing skills apart from regular meets where best practices are shared.

40

Technology The Company provides a prudent mix of proprietary and outsourced technologies, which facilitate business growth without a corresponding increase in costs.

Research and advice Provided clients with advice on diverse investment products based on the customers existing and prospective financial profile.

Key features

India Infoline was the first corporate in India to get the agency licence in
early 2001

The Company is the biggest corporate agency in India for life insurance
products

The Company operates multiple channels, namely branch network, preferred

client group, direct marketing, corporate tax advisory, walk-ins and semi- nars, to reach out to customers.

4.5

Portfolio Management

India Iinfolines Portfolio Management Service is a product wherein an equity investment portfolio is created to suit the investment objectives of a client. We at India Infoline invest your resources into stocks from diferent sectors, depending on your riskreturn profile. This service is particularly advisable for investors who cannot aford to give time or don't have that expertise for day-to-day management

Chapter 4. Product Profile of their equity portfolio. It is all about your money, being managed by the experts, while you continue with your routine life. Isn't it simple and totally hassle free. What's more, you can keep track of your dividends / bonus / rights issues with paperless tracking. So you always know how fast your investment is growing. It basically means assigning the right job to the right person.

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Salient Features of India Infoline PMS

Expert team of Research Analysts Stock Picking done by the Investment Committee Dedicated Relationship Manager Technology and Service driven Back-Ofce
4.6 Asset Management

India Infoline is a leading pan-India mutual fund distribution house associated with leading asset management companies. It operates primarily in the retail segment leveraging its existing distribution network to reach prospective clients. It has received the in-principle approval to set up a mutual fund. The group recently commenced its ofshore asset management business under the IIFL Capital brand. Also, IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to carry out global asset management operations. The Singapore arm can now ofer broking, asset management and investment banking services. IIFL Inc received an FII license, thereby facilitating the investment of dedicated funds in India. With ofces in New York, Singapore and Dubai, IIFL Capital aims to ofer India-focused equity products, fund management and advisory services for ofshore and domestic wealth management customers.

4.7

Wealth Management

The key to achieving a successful Investment Portfolio is to have a carefully planned financial strategy based on a thorough understanding of the client's in- vestment needs and risk appetite. The IIFL Private Wealth Management Team of

Chapter 4. Product Profile financial experts will recommend an appropriate financial strategy to efectively meet your investment requirements. Financial Advisor will analyze:

42

cash-ow requirements Your risk appetite Desired investment horizon Long-term goals

Chapter 5 Analysis

5.1

SWOT Analysis

Introduction
SWOT Analysis is a strategic planning tool used to evaluate the strengths, weaknesses, opportunities, and threats for a business entity. It involves specifying the objective of the business venture or project and identifying the internal and exter- nal factors that are favourable and unfavourable to achieving that objective. The technique is credited to Albert Humphrey, who led a research project at Stanford University in the 1960s and 1970s using data from fortune 500companies Strengths: Attributes of the organisation which are helpful to achieving the objective. Weaknesses: Attributes of the organisation which are harmful to achieving the objective. Opportunities: External conditions which are helpful to achieving the objective. Threats: External conditions which could damage the businesss performance.

43

Chapter 5. Analysis

44

SWOT Analysis Of India Infoline Ltd

Strengths

Customization
It understands the dreams, needs, aspirations, concerns and resources are unique and this is reected in every move they do for the sake of individual customer. This is the greatest value it provide online trading products like Smart Invest and Smart Trade.

Expertise
India Infoline Ltd brings within the customers reach their institutional ex- pertise and the ability to efectively combine an invaluable understanding of the financial markets, with an intention of building a long-term partnership.

One-stop-shop for all the investment needs

India Infoline Ltd gives all the types of services and products an individual investor can dream and think of. All the financial products and services are under one-roof.

Unbiased and objective advice

The teams of expert investment advisors customize plans to suit the needs of investors.

Extensive research
India Infoline Ltd make sure that they are always accessible to customers through a host of mediums. A customer can contact them either through website or through their branches and channel partners of more than 300 ofces across India.

Chapter 5. Analysis

45

Brand image
India Infoline Ltd as such is a well known brand in industry.

Competitive pricing
It charges less brokerage compared to its competitors.

Weaknesses

Expensive products
Some of the products like SmartTrade are quite expensive. An annual charge for SmartTrade is Rs. 3000.

Tedious procedures
Tedious procedures and delays in processing the data and documents of new customers.

Fund transfer
It has tie-ups with only 5 banks for online fund transfer, where as other competitors have more tie-ups.

Attrition
High attrition rates in trainees category.

Unattractive ofers
Some ofers of the company like Advance Subscription Plan with a deposit of Rs.50,000 to avail low brokerage charges. The low brokerage charges will be efective for the clients for a minimum turnover of Rs. 50 Crore p.a.

Chapter 5. Analysis

46

Opportunities

Indian economy seems to be out of recession. This is the right time for
inventers to re-enter the market. The company should adopt some strategies to increase the business through existing clients.

The increasing number of management graduates helps to get sales force at

trainee levels at less salaries or commission basis. It reduces the salaries and commissions expenses of the company. The company can tie up with reputed B Schools for trainees.

Huge untapped market in rural areas, Tier2 and Tier 3 cities and towns of
India can be concentrated to increase the business.

Many a banks are ofering fund transfer services. The company can increase
the tie-ups for fund transfers at attract customers of diferent banks.

Threats

Stif competition from existing players in the market and there is also a
threat of new entrants. It has lead to cut throat competition in terms of brokerage charges and exposure.

Increasing awareness of mutual funds and ULIPs created by Domestic Institutional Investors has reduced the direct investment in to stock market to some extent. This automatically reduces the business of stock brokers.

Changing economic scenario in India and changes in government policies will

have great impact on the revenue of this company

Many a investors burnt their figures during the bearish market conditions.
It has turned many a trading accounts inoperative.

Chapter 6 Findings, Suggestions & Conclusion

6.1

Findings
resources are unique and this is reected in every move they do for the sake of individual customer. This is the greatest value it provide online trading products like Smart Invest and Smart Trade

1. India Infoline Ltd understands the dreams, needs, aspirations, concerns and

2. India Infoline Ltd brings within the customers reach their institutional expertise and the ability to efectively combine an invaluable understanding of the financial markets, with an intention of building a long-term partnership 3. India Infoline Ltd gives all the types of services and products an individual investor can dream and think of. All the financial products and services are under one-roof. 4. It charges less brokerage compared to its competitors. 5. Some of the products like SmartTrade are quite expensive. An annual charge for SmartTrade is Rs. 3000. 6. Tedious procedures and delays in processing the data and documents of new customers. 7. Due to the presence of top players in the capital market, the revenues of the company declines from financial year 2008-09 to 2009. 47

Chapter 6. Findings, Suggestions & Conclusion 8. According to the company research report 2008-It is clear that people are ready to bear medium risk in anticipation of average returns. 9. Most investors prefer short term investments they regularly prefer to change their investment patterns according to the changes and updations. 10. Investors study the past performance carefully before they invest into any of the investments.

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6.2

Suggestions
inventers to re-enter the market. The company should adopt some strategies to increase the business through existing clients

1. Indian economy seems to be out of recession. This is the right time for

2. Many a banks are ofering fund transfer services. The company can increase the tie-ups for fund transfers at attract customers of diferent banks 3. India Infoline Ltd Investsmart can tie up with retail malls and take franchisee of the company in their malls. 4. Company should create the awareness about investment in securities among the investors. They should visit the general public, businessmen, government ofces and other work places and guide them about the stock market. This will help the company to large customer base. 5. The company can conduct seminars, workshops on capital markets, so that customers will come to know about the risk and return involved in investing equity market. 6. The company has to provide proper training to new investors to avoid losses. 7. Even the investors should take initiative and form as forums to develop their knowledge towards investments as now days there are several types of financial products available for the profitability of the investors.

Chapter 6. Findings, Suggestions & Conclusion

49

6.3

Conclusion

Most of the financial products in India are still at a growth stage and hence there are ample of opportunities for all the financial services ofered companies to tap investments. The perception of investors is yet to be changed because still they feel comfortable in traditional style of investment i.e., investing in Mutual funds rather than investing in Derivatives or Equity. Hence, there is a lot amount of education has to be provided to make people aware of various investment opportunities. In a growing economy as ours every investor if wisely takes decision to invest can expect a lot of returns. But knowledge of investing in Stock market is only limited to young urban population and does not have enough penetration in tier 2 and tier 3 cities and almost nil in rural areas. To excel and achieve a sustainable growth under current market situation with lots of completion in financial sector, India Infoline Ltd Investsmart needs to endeavor with maximum eforts. The company can achieve several more major milestones in future by maintaining the existing customer relationship [CRM]. Overall, India Infoline Ltd is able to give more than satisfactory services to its customers all over India. With state of art infrastructure and well established network of branches all over India will no doubt will make it to climb the ladder of leadership in the brokerage industry and truly become Indias financial multiplex. The companys claim of being Indias financial multiplex is very true as it continues to provide high quality financial products and services to lacks of customers by understanding their investment needs individually and satisfying them with all the financial products and services they can imagine.

Bibliography

Books

Kotler Philip, Marketing Management: 13th Edition, 2006, Prentice Hall of

India Ltd., New Delhi.

Krishna Swamy O.R, 2003, Methodology of Research in Social Science, Himalaya publishing House, Bombay ,ISBN: 81-8318-740-4

Websites

www.indiainfoline.com www.5paisa.com www.scribd.com www.sharekhan.com

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