PROJECT REPORT

AT

A Project Report submitted in partial fulfillment of the requirements

for the award of the degree of PGPBM

TO

SUBMITTED
BY

CHANDRA GUPTA
ENROLL.ID-N08BM047

SUBMITTED
TO

ITHILEKHA DASH RAKESH

TIWARI
FACULTY GUIDE
COMPANY GUIDE
 NOIDA DELHI

Acknowledgement

To acknowledge all the persons who had helped for the fulfillment of

the project is not possible for any researcher but in spite of all that it

becomes the foremost responsibility of the researcher and also the

part of research ethics to acknowledge those who had played a great

role for the completion of the project.

So in the same sequence at very first, I would like to

acknowledge my parents because of whom I got the existence in the

world for the inception and the conception of this project. Later on I

would like to confer the flower of acknowledgement to Ms. Ithilekha

Dash and other faculty members who taught me that how to do

project through appropriate tools and techniques. Because IDBI

Capital has trusted me and given me a chance to do my integrated

research study, I would like to give thanks to the organization and

especially to Mr. Nishant Komalam from the depth of my heart.

Rest all those people who helped me are not only matter of

acknowledgment but also authorized for sharing my success.

2
CONTENTS
CHAPTER 1 INTRODUCTION

1.1 General Introduction

1.2 Objectives of the study
1.3 Industry Profile.

CHAPTER 2 PROFILE OF THE ORGANIZATION

2.1 Introduction of the Organization.

2.2 Milestones of the organization
2.3 Financial synopsis & Business overview of the organisation
2.4 Product and Service profile of the Organization.
2.5 Organization structure and Organization chart.
2.6 detailed overview of servieses provided by the oraganization.

CHAPTER 3 DISCUSSIONS ON TRAINING.

3.1 Student’s work profile (Role and responsibilities).

3.2 Description of live experience.
3.3 Student’s contribution to Organization.

CHAPTER 4 STUDY OF SELECTED RESEARCH PROBLEM

4.1 Statement of research problem.

4.2 Statement of research objectives.
4.3 Research design and methodology.
4.4 Analysis of data.
4.5 Summary of Findings.

CHAPTER 5 SUMMARY AND CONCLUSIONS

5.1 Summary of Learning Experience.
5.2 Conclusions and Recommendations.

APPENDIX

3
Annexure like copy of questionnaires
Bibliography.

Chapter 1

INTRODUCTION

1.1 General Introduction about the sector

Financial sector

The financial sector is in a process of rapid transformation. Reforms

are continuing as part of the overall structural reforms aimed at

improving the productivity and efficiency of the economy. The role of

an integrated financial infrastructure is to stimulate and sustain

economic growth.

The US$ 28 billion Indian financial sector has grown at around 15

per cent and has displayed stability for the last several years, even

when other markets in the Asian region were facing a crisis. This

stability was ensured through the resilience that has been built into

the system over time. The financial sector has kept pace with the

growing needs of corporate and other borrowers. Banks, capital

market participants and insurers have developed a wide range of

4
products and services to suit varied customer requirements. The

Reserve Bank of India (RBI) has successfully introduced a regime

where interest rates are more in line with market forces.

Financial institutions have combated the reduction in interest rates

and pressure on their margins by constantly innovating and

targeting attractive consumer segments. Banks and trade financiers

have also played an important role in promoting foreign trade of the

country.

Banks

The Indian banking system has a large geographic and functional

coverage. Presently the total asset size of the Indian banking sector

is US$ 270 billion while the total deposits amount to US$ 220 billion

with a branch network exceeding 66,000 branches across the

country. Revenues of the banking sector have grown at 6 per cent

CAGR over the past few years to reach a size of US$ 15 billion. While

commercial banks cater to short and medium term financing

requirements, national level and state level financial institutions

meet longer-term requirements. This distinction is getting blurred

with commercial banks extending project finance. The total

disbursements of the financial institutions in 2001 were US$ 14

billion.

5
Banking today has transformed into a technology intensive and

customer friendly model with a focus on convenience. The sector is

set to witness the emergence of financial supermarkets in the form

of universal banks providing a suite of services from retail to

corporate banking and industrial lending to investment banking.

While corporate banking is clearly the largest segment, personal

financial services is the highest growth segment.

The recent favourable government policies for enhancing limits of

foreign investments to 49 per cent among other key initiatives have

encouraged such activity. Larger banks will be able to mobilise

sufficient capital to finance asset expansion and fund investments in

technology.

Capital Market

The Indian capital markets have witnessed a transformation over the

last decade. India is now placed among the mature markets of the

world. Key progressive initiatives in recent years include:

• The depository and share dematerialization systems that have

enhanced the efficiency of the transaction cycle

• Replacing the flexible, but often exploited, forward trading

mechanism with rolling settlement, to bring about transparency

6
• The infotech-driven National Stock Exchange (NSE) with a national

presence (for the benefit of investors across locations) and other

initiatives to enhance the quality of financial disclosures.

• Corporatisation of stock exchanges.

• The Securities and Exchange Board of India (SEBI) has effectively

been functioning as an independent regulator with statutory powers.

• Indian capital markets have rewarded Foreign Institutional

Investors (FIIs) with attractive valuations and increasing returns.

• The Mumbai Stock Exchange continues to be the premier exchange

in the country with an increase in market capitalization from US$ 40

billion in 1990-1991 to US$ 203 billion in 1999-2000. The stock

exchange has about 6,000 listed companies and an average daily

volume of about a billion dollars

• Many new instruments have been introduced in the markets,

including index futures, index options, derivatives and options and

futures in select stocks.

Venture Capital

Technology and knowledge have been and continue to drive the

global economy. Given the inherent strength by way of its human

capital, technical skills, cost competitive workforce, research and

entrepreneurship, India is positioned for rapid economic growth in a

sustainable manner. To realize the potential, there is a need for risk

7
finance and venture capital (VC) funding to leverage innovation,

promote technology and harness knowledge based ideas.

• The Indian venture capital sector has been active despite facing a

challenging external environment in 2001 and a competitive market

scenario.

• There were 34 VCFs and 2 Foreign VCFs registered with SEBI in

March 2002.

• According to a survey conducted by Thomson Financial and Prime

Database, India ranked as the third most active venture capital

market in Asia Pacific (excluding Japan). It recorded 115 deals in

2001 with average investment per deal amounting to US$ 7.9

million. 57 VCFs invested US$ 908 million in 101 Indian companies

during 2001.

• Disbursements for 2002 are expected to be US$ 2 billion and are

estimated to reach US$ 10 billion by 2007.

• There is an increased interest in India: 70 VC funds operate in

India with the total assets under management worth about US$ 6

billion.

• The amount has grown nearly twenty fold in the past five years.

Most VCs believe that 2002-03 will be driven by a relatively stable

economy and new initiatives that will boost the e-commerce sector,

particularly on-line trading and e-banking sectors.

8
INDUSTRY PROFILE

A. Origin and Development of the industry

The Bombay Stock Exchange (BSE) is known as the oldest exchange

in Asia. It traces its history to the 1850s, when stockbrokers would

gather under banyan trees in front of Mumbai’s Town Hall. The

location of these meetings changed many times, as the number of

brokers constantly increased. The group eventually moved to Dalal

Street in 1874 and in 1875 became an official organization known as

‘The Native Share & Stock Brokers Association’. In 1956, the BSE

became the first stock exchange to be recognized by the Indian

Government under the Securities Contracts Regulation Act.

The Bombay Stock Exchange developed the BSE Sensex in 1986,

giving the BSE a means to measure overall performance of the

exchange. In 2000 the BSE used this index to open its derivatives

market, trading Sensex futures contracts. The development of

9
Sensex options along with equity derivatives followed in 2001 and

2002, expanding the BSE’s trading platform.

Historically an open-cry floor trading exchange, the Bombay Stock

Exchange switched to an electronic trading system in 1995. It took

the exchange only fifty days to make this transition.

Capital market reforms in India and the launch of the Securities and

Exchange Board of India (SEBI) accelerated the integration of the

second Indian stock exchange called the National Stock Exchange

(NSE) in 1992. After a few years of operations, the NSE has become

the largest stock exchange in India.

Three segments of the NSE trading platform were established one

after another. The Wholesale Debt Market (WDM) commenced

operations in June 1994 and the Capital Market (CM) segment was

opened at the end of 1994. Finally, the Futures and Options segment

began operating in 2000. Today the NSE takes the 14th position in

the top 40 futures exchanges in the world.

In 1996, the National Stock Exchange of India launched S&P CNX

Nifty and CNX Junior Indices that make up 100 most liquid stocks in

10
India. CNX Nifty is a diversified index of 50 stocks from 25 different

economy sectors. The Indices are owned and managed by India

Index Services and Products Ltd (IISL) that has a consulting and

licensing agreement with Standard & Poor’s.

In 1998, the National Stock Exchange of India launched its web-site

and was the first exchange in India that started trading stock on the

Internet in 2000. The NSE has also proved its leadership in the

Indian financial market by gaining many awards such as ‘Best IT

Usage Award’ by Computer Society in India (in 1996 and 1997) and

CHIP Web Award by CHIP magazine (1999).

The National Stock Exchange of India was promoted by leading

Financial institutions at the behest of the Government of India, and

was incorporated in November 1992 as a tax-paying company. In

April 1993, it was recognized as a stock exchange under the

Securities Contracts (Regulation) Act, 1956. NSE commenced

operations in the Wholesale Debt Market (WDM) segment in June

1994. The Capital Market (Equities) segment of the NSE commenced

operations in November 1994, while operations in the Derivatives

segment commenced in June 2000.

11
Since the early 1950s till the early 1990s, Indian policy makers had

been nourishing the goal of Socialist pattern of society. They had

been following the development planning strategy of the former

Soviet Russia in a mixed economic framework. From July 1991, in

the face of an unprecedented foreign exchange crisis, Indian

economy started experiencing an IMF-World Bank dictated regime of

liberalization.

One aspect of this is financial liberalization. There is a move towards

privatization of nationalized banks – these banks are selling their

shares in the stock market. Transnational banks are encouraged to

operate in the Indian banking sector. Attempts are made to attract

foreign direct investment in different sectors. There is an increasing

entry of foreign portfolio capital due to stock market liberalization.

People are encouraged to invest in stocks through income tax

benefits and abolition of capital gains tax. There is a move to develop

a national pension fund which will be invested in different stocks to

get returns out of which pension will be provided to retired people. It

is expected that boosting up of stock market will accelerate the

process of capital accumulation and growth.

Stock market development has been an important part of financial

liberalization in the less developed countries (LDCs). In the pro-

12
liberalization circle, stock market is assigned to play an important

role in the capitalist development of LDCs.

There are many studies supporting the positive link between stock

market development and growth. Let us mention some of the recent

studies. One important study was undertaken by Levine and Zervos

(1998). Their cross-country study found that the Development of

banks and stock markets has a positive effect on growth. In another

study Levine (2003) argued that although theory provides

ambiguous relationship between stock market liquidity and economic

growth, the cross-country data for 49 countries over the period

1976-93 suggest a strong and positive relationship (see also Levine,

2001). Henry (2000) studied a sample of 11 LDCs and observed that

stock market liberalizations lead to private investment boom.

Recently, Bekaert et al (2005) analyzed data of a large number of

countries and observed that the stock market liberalization ‘leads to

an approximate 1 % increase in annual real per capita GDP growth’.

There are some economists who are skeptical. Long time back

Keynes (1936) compared the stock market with casino and

commented: ‘when the capital development of a country becomes

the by-product of the activities of a casino, the job is likely to be ill-

done’.

13
Referring to the study of World Bank (1993) Singh (1997) pointed

out that stock markets have played little role in the post-war

industrialisation of Japan, Korea and Taiwan. He argued that the

recent move towards stock market liberalisation is ‘unlikely to help

in achieving quicker industrialisation and faster long-term economic

growth’ in most of the LDCs.

Chapter 2

Chapter 2
Chap PROFILE OF THE ORGANISATION

IDBI Capital Market Services Ltd., (IDBI Capital) is a wholly owned

subsidiary of IDBI Bank Ltd and is a leading Investment Banking &
Securities Company.

IDBI Capital offers a full suite of products and services to Corporate,

Institutional and Individual clients. The range of services include:-

 Investment Banking
 Capital Market Products
 Private Equity
 Corporate Advisory Services
 Mergers & Acquisitions
 Project Appraisals & Debt Syndication
 Stock Broking - Institutional & Retail
 Distribution of Financial Products
 Debt Placement and Underwriting
 Fund Management (Managing Clients' Assets-Pension/PF Fund
Managers)
 Research Group

IDBI Capital is highly regarded for safety and trust and enjoys
a credit rating of “AAA” by CARE for its medium-term borrowings and
P1+ by ICRA for its short-term borrowings.

14
Milestones

1995 March Commenced Equity Broking on NSE CM

segment
1996 Commenced Debt Broking on NSE WDM
October segment
1996 Started operations as a Depository Participant
December
1996 Started to act as Arranger to Privately Placed
Bond issues
1998 April Commenced operations as a Portfolio Manager
1999 Acquired membership of BSE, Mumbai
February
1999 Started operations as a Primary Dealer
November
2002 March Achieved an outright secondary market
turnover exceeding Rs.100000 crore in G-Secs
2002 Commenced trading in Interest Rate Swaps
October
2004 June Commenced Merchant Banking & Corporate
Advisory Services
2006 Launched the online investing portal –
January www.idbipaisabuilder.in

15
 2006 IDBI Capital bags CNBC TV18 'Best National
September Financial Advisor-Institutional' award.
2006 IDBI Capital ties up with Punjab National Bank
November and Bank of Rajasthan Bank.
2007 March IDBI Capital ties up with Oriental Bank of
Commerce
2007 May IDBI Capital ties up with Karur Vysya Bank
(KVB)
2008 IDBI Capital bags CNBC TV18's prestigious
January National Financial Advisor Award
2008 March IDBI Capital ties up with Union Bank of India

QUICK FINANCIAL SYNOPSIS

IDBI (BSE:IDBIBANK) is one of India's leading public sector banks

and with 2008 net income of Rs 9415.9 Crores, India's 4th largest
bank in overall ratings. With 871 ATMs, 504 branches and 316
centers IDBI is currently the tenth largest development bank in the
world in terms of the reach. IDBI grew total revenues of Rs 14,481
Crores in 2006 to Rs 17,923 Crores in 2008. Over a similar period,
the company grew total assets from Rs 65,979 Crores in 2005 to Rs
120,601 Crores in 2008, an increase of 83.33%.]

IDBI is hampered by its status as a public sector, development bank.

The company has weak core operations and net interest margins of
<1%. A large part of the bank's equity holdings are in unlisted
stocks and other illiquid investments that are difficult to sell in rough
markets. That said, the first quarter of 2009 was marked by strong
loan growth of 31%. Despite a slow-down in recoveries from Rs100
Crores in Q1FY08 (Rs160 Crores in Q4FY08)], an ease in interest
rates by the Reserve Bank of India helped increase net profit from Rs
160 Crores in Q2FY09 to Rs 226 Crores in Q3FY09.

16
Business Overview

IDBI, also known as Industrial Development Bank of India was

established in 1964 by an Act of Parliament to provide credit and

other facilities for the development of the fledgling Indian industry.

IDBI provides financial assistance, both in rupee and foreign

currencies, for green-field projects as also for expansion,

modernization and diversification purposes. IDBI also provides

indirect financial assistance by way of refinancing of loans extended

by State-level financial institutions and banks and by way of

rediscounting of bills of exchange arising out of sale of indigenous

machinery on deferred payment terms. In September 2003, IDBI

diversified its business domain further by acquiring the entire

shareholding of Tata Finance Limited in Tata Home finance Ltd.,

signaling IDBI’s foray into the IDBI Bank, with which the parent

IDBI was merged, was a vibrant new generation Bank. The Pvt Bank

was the fastest growing banking company in India. The bank was

pioneer in adapting to policy of first mover in tier 2 cities. The Bank

also had the least NPA and the highest productivity per employee in

the banking industry.. IDBI Bank was ranked in the Top 5 Indian

banks on the basis of Business Segment size.

17
 SERVICES PROVIDING BY THE IDBI

CAPITAL

 Investment Banking
 Capital Market Products
 Private Equity
 Corporate Advisory Services
 Mergers & Acquisitions
 Project Appraisals & Debt Syndication
 Stock Broking - Institutional & Retail
 Distribution of Financial Products
 Debt Placement and Underwriting
 Fund Management (Managing Clients' Assets-Pension/PF Fund
Managers)
 Research Group

ORGANISATION STRUCTURE

18
National Level : National Head
Zonal Level : Zonal Head
Regional Level : Regional head
Divisional level : Cluster Head
Branch Level : Center Manager
Area Level : Business Development Executives & Freelancers

SALES METHODOLOGY

19
DETAIL OVERVIEW OF SERVICES

20
 (A) Capital Markets

IDBI Capital as an institutional player provides the entire gamut of

Capital Market services encompassing:

1. Public Offerings
2. Qualified Institutional Placements
3. Buyback
4. Takeover
5. Preferential Allotments
6. External Commercial Borrowings, FCCBs, etc.

The above activities entails liasioning with institutional investors

such as treasury departments of Domestic Institutions, Banks and

corporates, fund managers of mutual funds, private equity firms,

FIIs, HNIs.

1. IPO / FPO / Right Issues

Initial Public Offerings / Follow on Public Offerings / Rights Issues

IDBI Capital Market Services Ltd. (ICMS), as a Securities and

Exchange Board of India (SEBI) registered Merchant Banker,
provides the following services:

 Public issue of Equity and Debt Instruments in Indian markets

through Initial Public Offering (IPO), Follow on Public Offering
(FPO) and Rights Issue
 Acts as a Book Running Lead Manager, a Lead Manager, a Co-
Manager or an Advisor to the Issue.
 Underwrites Issues of Equity and Debt Instruments.
 Markets various instruments with Qualified Institutional Buyers
(QIBs), High Networth Individuals (HNIs), Corporate and Retail
investors.
 Prepares all documents like Prospectus / Letter of Offer and
assists the Issuer in complying with legal and statutory
requirements of SEBI, Stock Exchanges, Registrar of Companies
(ROC) and authorities under various corporate laws and
economic laws for issue of securities.

21
Advisory services on structuring of capital and debt, timing for

raising the same, choice of agencies to assist in the process of

raising funds, etc.

2. TakeOver

IDBI Capital helps corporate and institutional clients to carry out

successful takeovers on the Exchange listed companies. IDBI Capital

helps carry out the Due Diligence exercise in accordance with

relevant SEBI Rules / Regulations / Guidelines followed by the

preparation of legal documentation connected with Buybacks and

Take-overs

3. Buyback of Securities

IDBI Capital is active in assisting its clients in buy-back

programmes. With the presence of a strong Broking services, the

Company is in a position to offer comprehensive solutions to

accomplish buy-back programmes

4. Qualified Institutional Placement

IDBI Capital adds value to QIP issues which can be done only by

listed Companies to raise additional equity from Qualified

Institutional Buyers (QIBs). The strong relationship of IDBI

Capital with the different categories of QIB, FIIs, Fis, Mutual

Funds, Banks etc., makes a difference to the QIP placement

22
 programmes of the Companies. This is backed by a strong

research support.

5. Private Equity

They have developed strong expertise across different industries,

which enable customers to structure the transaction in that context.
In Private Equity (PE), they focus on sectors ranging from
Infrastructure, Power, Telecom, Healthcare & Life Sciences,
Pharmaceuticals, Hospitality, Banking, Logistics, Media, Auto
Ancillaries / Components, Cement, Steel, etc to name a few. Their
strength in Private Equity advisory is on account of:

 Strong relationships with PE funds and their key decision

makers
 Strong execution team gives an edge on optimal structuring
and efficient closure of transactions
 Value addition on entire structure of activities

Their PE transaction doesn’t come to an end with the transfer of

funds but also cater to entire gamut of Investment Banking needs.
IDBI Capital enables strong growth oriented companies raise capital
through;

• Preparation of Business and Financial Plans

• Preparation of the Information Memorandum
• Discussions and Negotiations with prospective investors
• Deal closure and Execution

(B) Investment Banking

Their Clients
They represent Government organizations, Public Sector
Enterprises and Indian Corporates covering sectors such as Steel
and other metals, Mines, Minerals, Chemicals, Healthcare,
Hospitality, Financial Services and other Core Sectors.

Their Team
They have a combination of professionals with varied background
who shares our values of truthfulness, objectivity, innovation and
analytical accuracy. The professional qualification of their team
provide a rock solid foundation for giving consulting services and
their depth of experience ranges from young management

23
 graduates from premier business schools to experienced finance
professional and qualified chartered accountants as well.

1.Financial Advisory

Financial Advisory has been considered as a strategic function

requiring innovative and distinct financial solutions both long and
short term focused on delivering greater shareholder value. IDBI
Capital Market Services Limited occupies a leading position being a
wholly owned subsidiary of IDBI Bank in the Corporate Finance
Market place. We support our clients by offering those creative ideas
and solutions that facilitates in enhancing the value.

They broadly advise on the following on the Financial Advisory

space:

 Business Valuation
 Financial & Commercial Due Diligence
 Merchant Financial Appraisal
 Joint Venture & Contract
 Bid Process Management
 Disinvestments
 Infrastructure Advisory
 Financial / Debt Restructuring
 Structured Finance & Securitisation

2.Project Advisory

IDBI Capital has considerable expertise in Project Advisory /

Finance. They advise their clients right from the project conception
stage followed by preparation of the Project Report and its Techno-
Commercial Appraisal with the support of accredited institutions
with optimal financial structuring. These reports pave the way for
contracting project loans for green-field as well as expansion
projects.

Their Project Advisory would also include turnkey advisory services

on financial structuring, implementation and documentation aspects
of Green-field Projects, Brown Field Projects and Public Private
Partnership Projects. The scope of work ranges from negotiations

24
with Banks, Financial Institutions and Multilateral agencies for
obtaining the final loan sanctions. Their Project Advisory Services
broadly include:

 Overview of the promoting company / SPV

 Review of the Project Structure and Project Costs including
various assumptions.
 Capital Structuring
 Real Estate Advisory
 Identification and evaluation of various sources of finance
 Financial modeling
 Risk Analysis and Allocation
 Development of a Security Package

3.Mergers & Acquistions

There are several means a Corporate adopt to improve shareholder

value e.g. increased revenue, market share, geographical expansion,
diversification, economies of scale; or to integrate through Merger &
Acquisition. Broadly speaking, M&A drivers could be customer
acquisition and top line growth, new market entry or competence
building. IDBI Capital’s M&A Advisory services covers right from the
initial negotiation stage to the final deal conclusion. We address the
following while taking up Mergers and Acquisitions;

 Business valuations and managing the entire merger process

 Assisting companies in acquisitions as sell off as joint ventures
 Assisting the Company in financing the deal
 Managing Open Offers
 Evaluating bids on the basis of the evaluation criteria set out
 Assisting in closing the deal
 Post Merger Integration

4.Strategic Advisory

Strategic Planning provides the framework for all the major business
decisions of an enterprises-decision on businesses, products &
markets, manufacturing facilities, investments & organizational
structure. It is indeed act as a pathfinder to various business
opportunities.

25
IDBI Capital assists clients in formulating strategy, developing
solutions and successfully managing results. They work with clients
to define their business strategy and implement interactive solutions
that redefine relationships with customers, suppliers and employees.

They help clients improve business performance by delivering a

complete, business-focused menu of end-to-end business solutions.
We broadly cover:

 Business and Strategic Planning

 Business Restructuring
 Entry Strategy
 Policy Advisory
 Organisation Restructuring
 Bid Process Management
 Process Consulting

(C) Institutional Broking & Distribution

Institutions and Corporates have surplus funds to manage on daily
basis as well as investible surplus for a defined period. The risk
differs for Institution and Corporates subject to their preferences.
The reward by way of return is always in proportion to the risk
taken. IDBI Capital define, advise and manage the same by
blending caution with aggression in the desired proportion to
teach client. The range of services include from Equity Broking
with customised research, advisory and distribution services for
investment in Mutual Funds, Debt/Bonds, Equity IPOs to
placement of Equities etc

26
  EQUITY

Equity Sales & Dealing

 The Institutional Broking Desk offers the Clients with a dealing

platform for trading in NSE and BSE. The parameters on market
conditions with an astute technical analysis from the Dealing
Desk enable the clients to take an apt decision. The intra day
analysis and reports are also available to clients on customized
basis.
 Further the Institutional Clients are provided with the
Derivatives Trading desk for Futures and Option. The
Institutional Clients are updated with fresh research Ideas on
the happening Scrip and Sectors.
 Being well connected with the global market Via Bloomberg,
the updates are shared from time to time.
 The interpreted brief report on the Futures and Option positions
before the Expiry is published for Client’s Circulation.

Daily market information is disseminated to the clients under

‘Heard on Street’ News heads.

Equity Research

They have research desks covering all aspects of the equities.

Their equities research desk publishes high quality research on all
major sectors of the industry and covers a wide spectrum of
companies listed on the Indian stock exchanges. Their derivatives
research team publishes daily/monthly reports on the trends in
the equity derivatives markets.

Their objective, uncomplicated and reliable research reports on

global markets and equity empower institutional investors and
make it possible for them to make informed investment decisions.
Their research teams have made a name for themselves in a very
short time.

27
 MUTUAL FUNDS

Mutual Fund Sales & Dealing

Several factors need to be taken into account when choosing an

instrument for investment – among these being safety, liquidity
& return related to the risk undertaken. Coming to the choice of
instruments, we have equity, debt, money market, commodity
based or even global equities. Mutual funds provide all this and
more.

Mutual funds offer an investment portfolio which can be either

diversified in nature or specific in category with risk skewed
towards debt to equity in varying proportions, all in one under
one umbrella. Mutual Funds cater to the specific requirement of
the Investor be it Institutional or Individual.

IDBI Capital Market Services Ltd. is into Mutual Fund

Distribution, Advisory and Fund Management. We address the
needs of any type of investor from corporate, banks, trusts,
firms, and societies to NRIs, HNIs and individual retail clients

We have been recognized as among the best financial advisers

in the country, and have been conferred with the CNBC TV 18
Financial Advisor Awards as the Best Performing National
Financial Advisor –Institutional segment in India for the past
two consecutive years.

As a distributor registered with almost all the SEBI Registered

Mutual Funds in India, we have also started offering Mutual
funds to our retail customers, both off-line and on-line.

Mutual Fund Research

The degree of risk in a Mutual Fund varies with the diversity in

portfolio and the combination of assets. Add to this the
different classes of instruments. Judging the best investments
avenues calls for astute incisive knowledge on markets and
individual companies.

The research desk of IDBI Capital Market Ltd. publishes a

number of detailed research Reports on the Mutual Fund
Industry viz.

28
 (i) Daily Report – detailing the NAV and growth of the schemes
on various periods
(ii) MF Monthly – with coverage on the Equity, Debt and Mutual
Fund market
(iii) Customized Sector Reports and
(iv) Scheme Reports for Special Clients.

Customized Reports are provided to specific institutional /

corporate clients. The universe for every category is selected
from the entire industry and rigorous analysis undertaken
including peer comparison. Various tools and techniques are
used, from studying the Alpha of every scheme with Standard
Deviation to Beta Analysis to Tryenor and Sortino.

 BONDS

 ICRA Rating Letter

 CARE Rating Letter
 Information Memorandum of IDBI Home Finance

(D) Retail Broking & Distribution

In addition to offering corporate, institutional clients, IDBI Capital

also offers a gamut of financial products and services that cater to

a varied cross section of investors.

IDBI Capital also offers to financial planners, retail intermediaries

and consumers to deliver lasting, innovative solutions.

Looking at the opportunities in our market and the growth of our

country, they believe it is high time investors are educated about

the nuances of investments. The knowledge and awareness gained

will empower investors and help them create wealth. They firmly

29
believe brokers, media and regulators have a pivotal role in

assisting the individuals to become wealthy. They will go extra

mile to empower the investors in managing their wealth to ensure

a more rewarding future.

IDBI Capital aims to provide a single-point source for retail

investors in their requirements for trading and investment

products.

Online Investing

Online investing provides investors with a convenient method to

take part in today’s financial markets. With their commitment to

enhancing investor education and awareness as a foundation

stone, they have created an online investing website

www.idbipaisabuilder.in for trading and depository services. This

platform enables easy and informed investing in Equity shares,

Futures & Options (F&O), IPO’s and Mutual Funds, for the retail

investors with a wealth of information, news, analysis and tools

sourced from the best in the industry. It also brings a large

database of information about companies which will assist them in

making an informed investment decision.

They strive to empower customer with information that helps

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 them make informed decisions and bank upon the right

opportunity. They bring cunsumers lots of useful information by

way of their varied market research reports on equity, derivatives,

and mutual funds

They offer an integrated three-in-one account linking savings

account, trading account and the demat account.

IPO Distribution

Investment Banking Activities

They have in the last financial year successfully lead managed

public/rights issues mobilizing more than Rs.900 crores. Some of the
notable examples were the Central Bank of India ‘s IPO and Varun
Industries Ltd fixed price issue. The responses to their issues have
been heartening.

Initial Public Offerings (IPO)

They are reaching out to the investors thru

 10,000 sub-brokers/agents spread across the country.

 Our 40 thousands online investors.
 And our own 25 branches.

They market and distribute IPOs of all lead investment bankers,

including their owned lead managed issues. In IPO distribution, the
marketing effort is the key, which enables them to carry out the
vigorous exercise of

 Putting the banners of the IPO on their portal and all across
branches.
 Sending the emails to all investors about the impending IPOs
and the product note.
 Sending SMS to all of them.

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  Making available the IPO application forms, in all of their
branches.

All their branches are in marketing & distribution of IPO application

forms, where they accept and bid the application forms to the
exchange.

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Mutual Fund Distribution

Several factors need to be taken into account when choosing an

instrument for investment – among these being safety, liquidity &
return related to the risk undertaken. Coming to the choice of
instruments, we have equity, debt, money market, commodity
based or even global equities. Mutual funds provide all this and
more.
Mutual funds offer an investment portfolio which can be either
diversified in nature or specific in category with risk skewed
towards debt to equity in varying proportions, all in one under one
umbrella. Mutual Funds cater to the specific requirement of the
Investor be it Institutional or Individual.

IDBI Capital Market Services Ltd. is into Mutual Fund Distribution,

Advisory and Fund Management. We address the needs of any
type of investor from corporate, banks, trusts, firms, and societies
to NRIs, HNIs and individual retail clients

We have been recognized as among the best financial advisers in

the country, and have been conferred with the CNBC TV 18
Financial Advisor Awards as the Best Performing National
Financial Advisor –Institutional segment in India for the past two
consecutive years.

As a distributor registered with almost all the SEBI Registered

Mutual Funds in India, we have also started offering Mutual funds
to our retail customers, both off-line and on-line.

We distribute and advise on the schemes of all the Mutual Fund

Houses registered with SEBI.

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 (E) Fund Management

IDBI Capital Market Services Ltd. (ICMS) is a leading Fund Manager

in the country for Provident, Pension and Retirement Benefit Funds.
The Company is a SEBI registered Portfolio Manager and manage its
Client’s assets under both discretionary and non-discretionary
mandates. These services are provided to various public and private
sector undertakings and their provident, pension, retirement benefit
and surplus funds. The Company’s client base includes leading
pension and provident funds in the country.

IDBI capital has been advising institutions, banks and corporates for
their investment in Debt, Mutual Funds and Equities over several
years. Its services include managing Client Assets--Pension &
Provident Funds, Surplus fund Management, Equity Portfolio
Management and Mutual Fund Advisory.

The funds have continuously yielded superior returns, which are

significantly higher than the benchmark.

ISO Certification 9001:2000

Keeping in view the importance of standardized processes and
service levels, the Company has gone in for ISO Certification for
Fund Management, and is the only company to have done so in this
sector. Being a public sector, the Company is also audited by
Comptroller and Auditor General (CAG) office and follows
transparent practices.

Regulatory Approval
IDBI Capital is a registered Portfolio Manager with Securities and
Exchange Board of India (SEBI) since 1998 and is authorised to
undertake Funds Management activities (Debt & Equity) for clients.
These activities would be governed by Securities and Exchange
Board of India (Portfolio Managers) Rules and Regulations, 1993.
SEBI Regisration No. of IDBI Capital is INP000000209, valid till the
year 2010.

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The Key strengths of IDBI capital Market Services in the areas of
Debt Fund Management are:

1. Fund Management experience of 10 years

2. Expertise in managing large corpus
3. Expertise in both Debt & Equity Market
4. IDBI Capital is the only Portfolio Manager in the Country to
achieve ISO 9001: 2000 Standard for Quality Management
Systems in Fund Management operations, with certification
from TUV NORD an accredited German standards firm
5. Substantial Returns Over Benchmark
6. IDBI Capital is a SEBI registered Portfolio Manager
7. Minimum Idle Days
8. Our fund management skill covers Portfolio Analysis that
includes ALM, Asset Allocation, Risk Analysis, Maturity Analysis
and Yield Analysis
9. Transparency of Operations
10.Strict adherence to Compliance Procedures
11.Highly Rated Debt Research
12.Presence in All Segment/ Asset of the Financial Services: IDBI
Capital deals in Equity and Equity related products and is one of
the highly rated Mutual Fund Distributor (won two consecutive
CNBC TV18 Institutional Financial Advisor Award). In
Investment Banking and Debt Capital Market- Rated in Top 15
by Prime Database
13.Group Strength in Debt Market: IDBI Capital is one of the
leading players in debt market with presence in primary
dealership since July 2007. The current operations of primary
dealership is conducted by a group company, IDBI Gilts

Infrastructure

 Experienced Fund Management Team: The Fund Management

team comprises of experienced professionals (experience
ranges between 2 years to 15 years) in Portfolio Management
with requisite exposure in the fixed income and equity segment
and qualifications
 Experienced Back-Office: The Clearing and Settlement
Operations are manned by experienced personnel with requisite
exposure to capital market and particularly debt market. The
process is standardized as per the regulatory and other specific
norms and mainly technology driven in most areas

35
  Accounting: Real time accounting of Remittances, Investments,
Interest and Redemption proceeds ensures accurate
reconciliation
 Professional Custodian: Member of NSDL for demat services and
offers Constituent SGL Account facility for Government
securities through IDBI Gilts Ltd.
 Functional Separation of Front and Back Office: Separate
personnel handle the front and back office functions to ensure
transparency and complete regulatory compliance
 Internal Controls: Adequate Risk Management systems in place
to ensure complete regulatory compliance
 Audit Systems: Audit of all transactions and reports by an
independent firm of chartered accountants. The accounts and
transactions are also subject to CAG audit and other regulators

Their Credentials

They are a leading full service securities house, offering a complete

suite of financial products and services to individual, institutional
and corporate clients:

 Wholly owned subsidiary of IDBI Bank Ltd.

 A well-capitalized financial position - networth of over Rs.350
crores as on 31st March 2008.
 A private equity fund of Rs.100 crores for investment in Mid Cap
and SME Growth Companies
 A leading player in Private Placement of Tier II bonds and
debentures for institutions, banks and corporates.

They manage Provident and Pension Funds of more than Rs.8,250

crores

36
 Chapter 3

DISCUSSION ON TRAINING

Student’s work profile(role and responsibilities)

I worked there with IDBI CAPITAL with a profile of sales trainee.

This profile offers me to understand the need of customer and

provide them the best deal possible with maximization of the profit,

both for the company as well as for the customer.

The most important aspect for the role of trainee is trust. So far

fulfillment of the targets one needs to:

• Capitalize on the old and loyal clientage which can be building

slowly by advising people in the best possible way.

• Generating new leads through various activities.

Generation of leads

Since I was new in the field so I had to start from scratch and

generate new leads to sustain in the market.

Cold calling is one of the trusted ways of getting to the customers

without meeting them. Although the rate of conversion remained

very less. For cold calling the quality and accent remains a very

important criterion. This activity give me mixed result. I often got

success and generated many leads through it but it also landed me in

37
awkward position where the customer were in different mood and

made us hear words for which a marketer should be always prepared

to hear. Corporate calls always remained more difficult to crack with

respect to retail sector.

The corporate were the most difficult and most temping to get

the business from. It took me one one day to crack Hi-tech Gears.

At IDBI CAPITAL after getting the product knowledge in the first

week at the branch I was also allotted distributor to work with. In

the initial phase I was accompanied by more experienced staff. After

I became known to the market and procedure I started attending

calls alone only.

After the third week my performance also improved and I was able

to get close to the targets, though it looked difficult to achieve in the

beginning. To get awareness of the every product I attended

diversified calls. This helped me to implement cross selling to get

better results.

LIMITATIONS:

1. Cold Calling

• Voice and accent plays a major role.

• The right time to call a customer cannot be decided, as the

customer may in a different mood at the time of calling.

• Time consuming

38
• Less success rate

2. Corporate

• Time consuming

• Contacts with higher authorities play a major role

Description of live experience

I was supposed to use the database provided by the company to

make cold calls or by directly meeting people to get new leads.

While making cold calls, we need to have:

• Good Communication Skills (Voice quality is clear and

articulate)

• Persistent and able to bounce back from rejection

• Good organizational skills.

• Ability to project a telephone personality (Enthusiasm,

friendliness)

• Flexibility: can adapt to different types of clients and new

situations.

Using a good database is very essential.

“Eighty percent of our business comes from 20 percent of our

customers" is a frequent statement at any sales convention. There's

hardly a sales executive who is not aware of the 80/20 rule”.

39
While talking to customers, I analyze their needs. Whether they

want to go for investment purpose. Suggest them the plan that best

suits them. If they agree to it then either we send across the agents

to close the deal or close it themselves.

SWOT ANALYSIS

Weakness Strength
• Low awareness due to • Co-operative and
lack of advertisement. Experienced Branch
• Lack of loyal clientage Managers
• Developing product. • Good Database
• IDBI Brand
• Low pricing

Opportunity Threat
• Untapped Market • Reach
• Increased spending • Stiff competition from
power existing players in the
• Changing Mindset of market
Customers • Better products
• Unpredictable Sensex

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 Chapter 4

STUDY OF SELECTED RESEARCH

PROBLEM

Statement of Research objectives

• To find the market potential and market penetration of

IDBI CAPITAL product offerings in Patna.

• To collect the real time information about preference

level of customers using Demat account and their
inclination towards various other brokerage firms e.g.
Indiabulls, Sharekhan, Indiainfoline, Religare, Alankit
, Unicon.

• To expand the market penetration of IDBI Capital.

Research design and methodology

It was important to collect detailed information on various

aspects for effective analysis. As “Marketing today is becoming more

of a battle based on information based society companies with

superior information enjoys a competitive advantage.

Methodology Adopted

The information was collected through person interview

and interview was conducted through the mode of questionnaire.

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Analysis of Data:

Data collection

The data collection was collected through primary as well as

secondary source.

PRIMARY DATA :

Primary data was collected from 155 respondents using a

schedule of question and a survey was conducted. The tabular

and graphical data was Microsoft excel.

SECONDARY DATA :

Secondary data was collected mainly from internet ,printed

journals on the capital markets of India ,newspaper articles and

books written on the Indian stock markets.

SAMPLING:

Judgment, non-random sampling was used. Respondents were

request to help with the schedule at their offices , homes or at

the IDBI office.

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SUMMARY OF FINDING

1. Preference of Investment

Fig4.5.1 Result of Preference of Investment

Interpretation: This shows that although the mutual funds market is

on the rise yet, the most favored investment continues to be in the

Share Market. So, with a more transparent system, investment in the

Stock Market can definitely be increased.

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 2. Awareness on Online Share Trading

Fig4.5.2 Result of Awareness of Online Share Trading

Interpretation: With the increase in cyber education, the awareness

towards online share trading has increased by leaps and bounds.

This awareness is expected to increase further with the increase in

Internet education.

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 3. Awareness of IDBI CAPITAL as a Brand

Fig4.5.3 Result of Awareness of IDBI as a Brand

Interpretation: This pie-chart shows that IDBI capital has a

reasonable amount of Brand awareness in terms of a premier Retail

stock broking company. This brand image should be further

leveraged by the company to increase its market share over its

competitors.

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 4. Satisfaction Level among Customers with current broker

Fig4.5.5

Result of

satisfaction level among customers with current broker

Interpretation: This pie-chart corroborate the fact that

Strategic marketing, today, has gone beyond only meeting Sales
targets and generating profit volumes. It shows that all the
competitors are striving hard not only to woo the customers but also
to make them Brand loyal by generating customer satisfaction.

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 5. Frequency of Trading

Fig4.5.6 Result of Frequency of Trading

Interpretation: Inspite of the huge returns that the share market

promises, we see that there is still a dearth of active traders and

47
investors. This is because of the non – transparent structure of the

Indian share market and the skepticism of the target audience that is

generated by the volatility of the stock market. It requires efficient

bureaucratic intervention on the part of the Government.

6. Percentage of earnings invested in Share Trading

Fig4.5.7 Result of percentage of earning invested in share trading

Interpretation: This shows that people invest only upto 10% of

their earnings in the stock market, again reiterating the volatile and
non-transparent structure of the Indian stock market. Hence,
effective and efficient steps should be undertaken to woo the
customers to invest more in the lucrative stock market.

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 Chapter 5

SUMMARY AND CONCLUSIONS

SUMMARY OF LEARNINGS EXPERIENCE

• To get initial success in this field is very difficult. Although the

business generation becomes easier with time as we serve more

people who then get added up in the loyal clientage. Thus time and

service are two most factors to get in this field.

• Also the corporate remains a very important segment which

gets business in bulk but retail cannot be ignored which makes your

business ticking.

• Customer remains in the pivotal position.

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 CONCLUSION AND RECOMMENDATIONS

Based on the findings of our project we would like to suggest the

following:-

• After sales services and follow up calls are important for

getting new references so trained telesales should be appointed for

this purpose whose sole work should be to make feedback calls.

• Investment is having too many financial products and not all

the salespeople are familiar with each and every product so the work

force should be segregated each group dealing in a specific product

and the sales target should be given likewise.

• While interacting with the investors I found that most of the

customers are unaware about the Mutual fund. Some of the people

look upon mutual funds and equity trading as gambling. Thus a

mutual fund awareness program can help to increase the penetration

of mutual funds in the market.

• Company should have a scheme of rewards and recognition to

employees and the field persons to boost their motivation.

KEY ISSUES AND CONCLUSIONS

Based on the above SWOT analysis and study of the available data

I have come to the following conclusions:

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HUGE POTENTIAL:

• All though relatively new entrants in the market, IDBI Capital

is slowly but surely gaining a strong hold because it is finally able to

grasp the investment climate in Patna. Secondly the branch

managers at all the branches are very knowledgeable with a lot of

experience in the financial markets so under their leadership can

definitely expand its base

• The entire workforce consists of mostly youngsters, which

means they can be encouraged and motivated to do good work

because they have a long way to go and most of them are eager to

climb the ladder.

• Right now IDBI is at its nascent stage and will surely grab the

major market under its belt very soon like in other fields.

Huge investments taking place:

• The Stock Market has been very buoyant until now especially in

the past 3 years. This particular trend is very favorable because a

soaring SENSEX means higher returns, which encourages the

investors to invest their money in the market. Although in the past 3

months the market has shown very unpredictable trend and has

already lost over 1000 points.

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• So in order to make the best the only thing required is to recruit

more field staff who should be trained in a proper way to get better

results.

APPENDIX

QUESTIONNAIRE
Q1. In which of these Financial Instruments do you invest into?

Shares Mutual Funds Bonds Derivatives

Q2. Are you aware of online Share trading?

Yes No

Q3. Heard about IDBI Capital?

Yes No

Q4. Do you know about the facilities provided by IDBI Capital?

Yes No

Q5. With which company do you have your DEMAT account?

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 Religare ICICI securities IDBI capital India Bulls

Others (please specify)

Q6. What differentiates your Share trading company from others? (in regards of
brokerage, satisfaction, services, products )

Q7. Are you currently satisfied with your Share trading company?

Yes No

Q8. How often do you trade?

Daily Weekly Monthly Yearly

Q9. What percentage of your earnings do you invest in share trading?

Up to 10% Up to 25% Up to 50% Above 50%

Q13. How do you rate these share trading companies? a. Religare

b. ICICI Securities
1. 2. 3. c. India Bulls
4. 5. d. IDBI Capital
e. Others (Please
specify)

Q14. What more facilities do you think you require with your DEMAT account?

53
 Personal Information

Name :

Age :

Sex : Male Female

Phone No :

Occupation:

References and Bibliography

Articles

• Capital Market Review 2003-04,Published by SHCIL

Books

• Financial Management Prashanna Chandra,6th edition

• Financial Management Khan & Jain ,3th edition

• Securities Analysis and Portfolio Management ,Fischer &

Jordon

• Research Methodology ,David .R. Cooper and Schindler

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 Websites

• www.shcil.com

• www.icicidirect.com

• www.investsmart.com

• www.nseindia.com

• www.economicstimes.com

• www.idbibank.com

• www.idbicapital.com

• www.google.com

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