A Summer Internship Project Report on

To do a detailed study of clients, different investment tools in capital market and preference of equity investment for the clients of Edelweiss
Submittied in partial fulfillment of the requirement for the degree of Post Graduate Diploma in Management International Business By

Taher zakir tailor

Roll No.37 Under the guidance of

Prof. Hemant prohit

A study conducted for

Edelweiss broking ltd.

At

Indira School of Business Studies

Tathwade, Pune 411033 2011-2013

Acknowledgement I would like to express my sincere thanks to the Director & Management of Indira School of Business Studies ,pune, for their valuable guidance & support. I am extremely thankful & grateful to Prof. Hemant Prohit for his constant guidance & encouragement throughout the study. I would like to express my sincere thanks & gratitude to Mr. Kapil gupta of (Edelweiss Broking Ltd.Pune), for his / her support & guidance during my stay in their organization. I would also like to express my devoted thanks to my beloved parents & my friends for their relentless support & assistance to make this project a reality. Last but not the least, I would like to thank all my respondents for their co-operation & participation in data collection, which has enabled me to complete the project successfully.

Date : 15 MAY 2012 Place : PUNE (Taher Tailor)

Certificate from ISBS

ii

Certificate from the Company

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Executive Summary
Edelweiss Broking Limited is a Mumbai based company which started its operation in the year 1995.And I did my internship in pune kothrud branch. The mission statement of the company is IDEAS CREATE VALUES PROTECT. It provides sevices like institutional equities, private client broking,asset management, wealth management, investment advisory services,treasury,insurance broking,wholesale financing and mutual fund.The major clients are corporation, institutional investor,and high network individuals. T h i s P r o j e c t i s To do a detailed study of clients, different investment tools in capital market and preference of equity investment for the clients of Edelweiss.It talks about studying the clients, differentent investment tools, approach clients for investment in equity. As an intern, I have carried out research work. I went for the field work, talked to customers and tracked their investment pattern and collected their preferences for various financial products of the company.Adding to this, I have been communicating with different types of customers through various media, including client visits , who fall under the sample space for this project. My job here is to advice them to make investment in equity, depending on certain criteria, in order to make investing easier for them. I have also worked as a part of sales force of the company and sold Demat account. I have visited to many places in pune. Some of the data has been collected from the customers regarding their views about Edelweiss. I have been talking to existing clients of the company over the phone, asking for an appointment following which there will be client visit. In the visit the main focus would be to convince the clients to do more business with company and telling them the benefits provided by the company.So traching the transformation is really interesting and worth appreaciating.I have concenterated on existing and dominant clients trying to know their opinion about their association with Edelweiss. Edelweiss.Interaction with the clients helped me to know the image of the company in the minds of the customers and it helped me to come up with suggestions to further improve the services of the company. I hope my findings are useful for the company.

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Table of Contents
Acknowledgement ........................................................................................................................... i Certificate from ISBS ..................................................................................................................... ii Certificate from the Company ....................................................................................................... iii Executive Summary ....................................................................................................................... iv List of Tables ................................................................................................................................. vi List of Figures ............................................................................................................................... vii Abbreviations ................................................................................................................................ vii Introduction ..................................................................................................................................... x Industry Overview ........................................................................................................................ xii Company Overview ...................................................................................................................... xx Review of Literature / Theoretical Background ........................................................................ xxix Objective ................................................................................................................................. xxxvii Research Methodology ............................................................................................................ xxxix Data Analysis and Interpretation ................................................................................................ xliv Conclusions ................................................................................................................................... lvi Limitations .................................................................................................................................. lviii Recommendations .......................................................................................................................... lx Appendices .................................................................................................................................... lxi Bibliography ............................................................................................................................... lxiii

List of Tables
Tables Table no. 1 Table no. 2 Table no. 3 Table no. 4 Table no. 5 Table no. 6 Table no. 7 Table no. 8 Table no. 9 Page no. 44 45 46 47 48 50 51 52 53

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List of Figures
Figures Figure no. 1 Figure no. 2 Figure no. 3 Figure no. 4 Figure no. 5 Figure no. 6 Figure no. 7 Figure no. 8 Figure no. 9 Page no. 44 45 46 47 48 50 51 52 53

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Abbreviations
NSE BSE SENSEX NIFTY NYSE CNX S&P IISL FII CAGR SEBI HNI IT FMCG TELCOM

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Chapter 1: Introduction

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Introduction
I have done my internship in EDELWEISS BROKING LTD. Kothrud branch, pune. The project given to me was to convince the existing client for investment in stock market. I was given the data base of 104 clients, my task was to call them and ask for a meeting with them. I also went for field work where I have filled up around 300 questionnaires. The main purpose of the project was to activate the client for trading in stock market. These 104 clients are those clients who had open their account in the company but had never traded since last 2years and some of them are once traded and after that they had stop trading, so my task was to convince these clients for trading.Most of the clients are situated outside pune, due this most of the meetings could not done, and it was difficult to explain the investment plan to this client over the phone due to this I faced the problem in convincing them . There was the condition given to me in the task that daily I had to do minimum 1 meeting with the existing client. Condition was like for 2 meeting I had to fill up 10 quetionnaire, for 1 meeting I had to fill up 15 questionnaire, and for 0 meeting I had to fill up 25 questionnaire daily. The project was limited to pune region only. During my internship I had visited number of places in pune for client meeting. During this projrect I have done 8 meetings,out of 8 meetings 5 meetings were with existing client and 3 meeting were with new clients. I had opened 1 demat account of new client for 5000 rupees margin amount. I had also collected 10000 rupees margin amount from existing client. During this project there was a contest for every intern working there, the contest was about Systematic Investment Plan (SIP) for mutual fund.The name of this fund was RELIANCE EQUITY OPPORTUNITIES FUND. Under this contest every intern supposed to close atleast 3 SIP for mutual fund for 1000 rupees each. I have collected 3 SIP for mutual fund for 1000 each. Over all I have contributed business of 18000 rupees and 300 questionnaire to the company.

Chapter 2: Industry Overview

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Industry Overview
INDIAN STOCK MARKET The Indian equity market kept on sliding in September 2008 with the S&P CNX NIFTY, showing the second sharpest fall since January 2008, with a decline of around 10%. With all courtesy to the US financial markets and its crisis bug, an estimated amount of Rs 2.3 trillion of shareholders' wealth were eroded in the Indian stock markets.

Global meltdown and Indian stock market

The Indian stock markets are in a tizzy. The impact of the global sub-prime crisis, known mainly as the 'financial tsunami', emanated from the US and spread its wings across the world. This has resulted in a whirlwind, sweeping the Indian capital market off its feet. The Sensex fell from an astronomic high of 21,200 as on January 2008, to below 9,000 mark as on October 2008, with a fall of 35% in the month of October alone. Reason for indian stock market fall The FIIs (Foreign Institutional Investors), in the last few years had been a strong growth driver for the Sensex. They have been investing billions of dollars in the capital markets, fuelling high valuations, which in turn sharpened the appetite for expansion, acquisitions and higher corporate growth. Based on supernormal profits (CAGR of 33% in last five years as against lack luster performance in the 1990s) in the corporate sector, they have been charting ambitious plans for capital expenditure and suitable acquisitions even in the global markets.

The Indian retail investors too, buoyed by the strong economic growth adopted aggressive investment and wanted to gather above normal returns. The high commodity and real estate prices were the red flags that were accompanied with the strong up trends.

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All the three stakeholders - the market, investors and corporate management now have to share the 'spoils' of the market. Contraction, deflation and recession - all these have become the buzzwords in economies worldwide. In the context of globally 'integrated markets', the subprime crisis had different levels of impact in the emerging capital markets including India.

The fall of the big investment banks in the US and the global liquidity crunch forced the FIIs to liquidate their positions in the Indian stock market leading to the steep fall in the Sensex. The redemption pressures on mutual funds have not helped either. Locally, investors - retail, HNI and institutional have shown a hard mentality ignoring warning signals from the economy and markets and continued to take a bet, initially based on fundamentals and then on sentiments.

Investors particularly retail have been caught unprepared by the steep fall in Sensex and are now sitting on huge losses. While the underlying fundamentals of the economy still remain strong, quite a few sectors like exports, real estate, IT and commodities (not all of them with inherent speculative tendencies) are facing most of the brunt of a slowing economy. The corporates, some of them with cash-rich balance sheets had been taking on ambitious expansion plans and that too over a longer time horizon. With credit flows from banks slowing down (banks are hesitant to even trust each other!) corporates are finding it difficult to carry out some of these plans as their valuations have come down and raising funds from other sources has become difficult. All the three stakeholders appear to be pulled into a whirlpool of greed, overstated ambitions and 'irrational exuberance', reaching new highs.

What is NSE & BSE?

1. NSE (National Stock Exchange):The National Stock Exchange (NSE) is a stock exchange located at Delhi, India. It is the 9th largest stock exchange in the world by market capitalization and largest in India by daily turnover and number of trades, for both equities and derivative trading. NSE has a market xiii

capitalization of around US$1.59 trillion and over 1,552 listings as of December 2010. Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India, and between them are responsible for the vast majority of share transactions. The NSE's key index is the S&P CNX Nifty, known as the NSE NIFTY (National Stock Exchange Fifty), an index of fifty major stocks weighted by market capitalisation. NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities. There are at least 2 foreign investors NYSE Euronext and Goldman Sachs who have taken a stake in the NSE As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India NSE is the third largest Stock Exchange in the world in terms of the number of trades in equities. It is the second fastest growing stock exchange in the world with a recorded growth of 16.6%. Markets:Currently, NSE has the following major segments of the capital market: Equity Futures and Options Retail Debt Market Wholesale Debt Market Currency futures Mutual Fund Stock Lending & Borrowing August 2008 Currency derivatives were introduced in India with the launch of Currency Futures in USD INR by NSE. Currently it has also launched currency futures in EURO, POUND & YEN. Interest Rate Futures was introduced for the first time in India by NSE on 31 August 2009, exactly after one year of the launch of Currency Futures.

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NSE became the first stock exchange to get approval for Interest rate futures as recommended by SEBI-RBI committee, on 31 August 2009, a futures contract based on 7% 10 Year GOI bond (NOTIONAL) was launched with quarterly maturities. Indices:NSE also set up as index services firm known as India Index Services & Products Limited (IISL) and has launched several stock indices, including:[13]

S&P CNX Nifty (Standard & Poor's CRISIL NSE Index). CNX Nifty Junior. CNX 100 (= S&P CNX Nifty + CNX Nifty Junior). S&P CNX 500 (= CNX 100 + 400 major players across 72 industries). CNX Midcap (introduced on 18 July 2005 replacing CNX Midcap 200).

Exchange Traded Funds on NSE:NSE has a number of exchanges. These are typically index funds and GOLD ETFs. Some of the popular ETF's available for trading on NSE are:

NIFTYBEES - ETF based on NIFTY index Nifty BEES Live quote GoldBees - ETF based on Gold prices. Tracks the price of Gold. Each unit is equivalent to 1 gm of gold and bears the price of 1gm of gold.

BankBees - ETF that tracks the CNX Bank Index.

2. BSE (Bombay Stock Exchange):The Bombay Stock Exchange (BSE) is a stock exchange located on Dalal Street, Mumbai and is the oldest stock exchange in Asia. The equity market capitalization of the companies listed on the BSE was US$1.63 trillion as of December 2010, making it the 4th xv

largest stock exchange in Asia and the 8th largest in the world. The BSE has the largest number of listed companies in the world. As of December 2010, there are over 5,034 listed Indian companies and over 7700 scraps on the stock exchange, the Bombay Stock Exchange has a significant trading volume. The BSE SENSEX, also called "BSE 30", is a widely used market index in India and Asia. Though many other exchanges exist, BSE and the National Stock Exchange of India account for the majority of the equity trading in India. While both have similar total market capitalization (about USD 1.6 trillion), share volume in NSE is typically five times that of BSE. Indices:The launch of SENSEX in 1986 was later followed up in January 1989 by introduction of BSE National Index (Base: 1983-84 = 100). It comprised 100 stocks listed at five major stock exchanges in India - Mumbai, Calcutta, Delhi, Ahmedabad and Madras. The BSE National Index was renamed BSE-100 Index from October 14, 1996 and since then, it is being calculated taking into consideration only the prices of stocks listed at BSE. BSE launched the dollar-linked version of BSE-100 index on May 22, 2006. BSE launched two new index series on 27 May 1994: The 'BSE-200' and the 'DOLLEX-200'. BSE-500 Index and 5 sectoral indices were launched in 1999. In 2001, BSE launched BSE-PSU Index, DOLLEX-30 and the country's first free-float based index - the BSE TECk Index. Over the years, BSE shifted all its indices to the free-float methodology (except BSE-PSU index). BSE disseminates information on the Price-Earnings Ratio, the Price to Book Value Ratio and the Dividend Yield Percentage on day-to-day basis of all its major indices. The values of all BSE indices are updated on real time basis during market hours and displayed through the BOLT system, BSE website and news wire agencies. All BSE Indices are reviewed periodically by the BSE Index Committee. This Committee which comprises eminent independent finance professionals frames the broad policy guidelines for the development and maintenance of all BSE indices. The BSE Index Cell carries out the day-to-day maintenance of all indices and conducts research on development of new indices. SENSEX is significantly correlated with the stock indices of other emerging markets.

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PRODUCTS OF STOCK MARKET Shares A share is a single unit of ownership in a corporation, mutual fund, or other organization. A joint stock company divides its capital into shares, which are offered for sale to raise capital, termed as issuing shares. Thus, a share is an indivisible unit of capital, expressing the proprietary relationship between the company and the shareholder. The denominated value of a share is its face value: the total capital of a company is divided into number of shares.

In financial markets, a share is a unit of account for various financial instruments including stocks (ordinary or preferential), and investments in limited partnerships, and real estate investment trusts. The common feature of all these is equity participation (limited in the case of preference shares).

The income received from shares is known as a dividend. A shareholder, also known as a stockholder, is a person who owns shares of a certain company or organization, and is thus a part-owner of the company. The process of purchasing and selling shares often involves going through a stockbroker as a middle man. Gold Gold is a dense, soft, shiny, malleable and ductile metal and is a chemical element with the symbol Au and atomic number 79.

Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a transition metal and a group 11 xvii

element. It is one of the least reactive chemical elements solid under standard conditions. The metal therefore occurs often in free elemental (native) form, as nuggets or grains in rocks, in veins and in alluvial deposits. Less commonly, it occurs in minerals as gold compounds, usually with tellurium. Mutual fund A mutual fund is a type of professionally-managed collective investment scheme that pools money from many investors to purchase securities.[1] While there is no legal definition of mutual fund, the term is most commonly applied only to those collective investment schemes that are regulated, available to the general public and open-ended in nature. Hedge funds are not considered a type of mutual fund. Debentures A Debenture is a debt security issued by a company (called the Issuer), which offers to pay interest in lieu of the money borrowed for a certain period. These are longterm debt instruments Issued by Private Sector Companies. These are issued in denominations as low as Rs 1000 and have maturities ranging between one and ten years. Debentures enable investors to reap the Dual Benefits of Adequate Security and Good Returns. Unlike other Fixed Income Instruments such as Fixed Deposits, Bank Deposits they can be transferred from one party to another by using transfer from. Debentures were issued in physical form. Now corporate/PSUs have started issuing debentures in Demat form. Debentures can be listed on a stock exchange, giving you an opportunity to sell them and exit earlier then the tenure of the debenture. In Simple Words, A debenture is a debt instrument, just like a fixed deposit (FD), usually issued by a company. You invest a sum, and the company pays you a fixed rate of interest for the pre defined period. After the period gets over, you get back your principal amount. xviii

So, what is the difference between a debenture and a company fixed deposit (FD)? They are very similar but the key difference is liquidity.

Chapter 3: Company Overview

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Company Overview
Edelweiss is one of India's leading Financial Services Groups, with operations that span more than forty different lines of business and subsidiaries. Our operations straddle the entire spectrum of financial services in the wholesale and retail market segments including Asset Management, Capital Markets, Credit, Housing Finance and Insurance services.

Indias growth story is driven by a savings rate of about 32%, one of the youngest populations in the world and strong domestic consumption.

With a net worth of over INR 28 Bn, Edelweiss is adequately capitalised to exploit the opportunities emerging from this robust economic growth.

Edelweiss employs over 2900 professionals across 297 offices and branches spread across 144 cities of India.

Our core philosophy of Ideas create, values protect is translated into an approach that is led by entrepreneurship and creativity, and protected by intellectual rigour, research and analysis. Relationship with investors At Edelweiss, we consider Investor Relations to be the key to building transparent, open and long-term relationships with our stakeholders. Our Investor Relations program is committed to maintaining effective communication with the investing community by adopting best practices. Our investor relations program is also designed to provide investors, analysts and other stakeholders a complete and accurate picture of the companys performance both past and present. Investor Relations plays an important role in the success of Edelweiss as we launch new xx

businesses besides scaling up the established businesses. It is designed to help us to expand our reach to the investment community, enabling them to understand and appreciate our business model and long-term strategy, and be a part of the Edelweiss family.

Regular quarterly conference calls with our investors and analysts keep them updated on the developments in the company. We also distribute and digitally publish investor presentations and other useful information after declaration of each quarterly financial result.

We welcome your suggestions and feedback on our Investor Relations effort. Please send feedback or suggestions to ir@edelcap.com.

Evolution of Edelweiss:-

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Business Overview:Edelweiss operations are broadly divided into Agency and Capital business lines. The Agency business line includes Investment Banking, Broking - Institutional, HNI and Retail, Asset Management and Investment advisory and distribution services. The Capital business line includes Financing and Treasury Operations. The strategies employed ensure that there is a balanced mix of revenues among the three revenue streams viz., Agency fee & commission, Treasury operations income and Interest income, thereby achieving the intended diversification in revenue streams.

Product of edelweiss :1.Edelstar:- it is the most popular product of edelweiss. Its comes in every Friday of week. Every Friday one company is suggested by edelweiss to buy. 3 month is a time limit of every edelstar. Edel star is suggested on basis of fundamental as wel as technical analysis..

Edelstar provides information like: Balance sheet of 10 years Balance sheet of 5 competitor of 5 year Information about their product and services Internal and external news .like swot analysis, media news etc Merger and acquisition. Research and strategy like current share price, target price ,stop loss.

Edelstar has edelscore which is base on past performance. Score- 1to 5- Average performance 6 t0 7-good performance 7 to 10-excellent performance. xxii

On an average one edelstar provide minimum 5 to 6% return.

Why edel star launch on Friday? Edel star launch on Friday because Saturday and Sunday market are close so investor will get more time to study market .

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Technical weekly pics:- it is the popular product of edelweiss. Three company is suggested by edelweiss to buy. 3 month is a time limit of every Twp Twp is suggested on basis of fundamental as wel as technical analysis..

Twp provides information like: Balance sheet of 10 years Balance sheet of 5 competitor of 5 year Information about their product and services Internal and external news .like swot analysis, media news etc Merger and acquisition. Research and strategy like current share price, target price ,stop loss.

Twp has edelscore which is based on past performance. Score- 1to 5- Average performance 6 t0 7-good performance 7 to 10-excellent performance.

On an average one Twp provide approx 8%.

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Edel traker :- edel traker for those individual who are interested to trade in delivery (long term)mode.

More than three company is suessted by edelweiss to buy. 1 t0 6 month is a time limit of every edel traker. Edel traker is suggested on basis of fundamental as wel as technical analysis..

Twp provides information like:Fundamental and technical analysis

Balance sheet of 10 years Balance sheet of 5 competitor of 5 year Information about their product and services Internal and external news .like swot analysis, media news etc Merger and acquisition. Research and strategy like current share price, target price ,stop loss.

Edel traker has edelscore which is base on past performance. Score- 1to 5- Average performance 6 t0 7-good performance 7 to 10-excellent performance.

On an average edel traker share are those share which give less return in comparison to edel star and Twp. It gives maximum 6% of return.

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Quant basket:- quant basket is a product which provide group of company.

There are minimum 6 basket in quant basket. In quant basket profit is evaluate in monthly basis.

Two types of provide information:Quant basket is suggested on basis of fundamental as wel as technical analysis.. Twp provides information like: Balance sheet of 10 years Balance sheet of 5 competitor of 5 year Information about their product and services Internal and external news .like swot analysis, media news etc Merger and acquisition. Research and strategy like current share price, target price ,stop loss.

Twp has edelscore which is base on past performance. Score- 1to 5- Average performance 6 t0 7-good performance 7 to 10-excellent performance.

On an average every company provide minimum 4% of return and total return become 24%.

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Structure product:- structure product gives return on more than 1 year.

Twp provides information like: Balance sheet of 10 years Balance sheet of 5 competitor of 5 year Information about their product and services Internal and external news .like swot analysis, media news etc Merger and acquisition. Research and strategy like current share price, target price ,stop loss.

Twp has edelscore which is base on past performance. Score- 1to 5- Average performance 6 t0 7-good performance 7 to 10-excellent performance.

On an average one structure product provide only maximum of 5% return.

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Chapter

4:

Review

of

Literature

Theoretical Background (delete whichever is not applicable)

xxviii

Review of Literature / Theoretical Background

Edelweiss Capital Limited (www.edelcap.com), incorporated on 21st November 1995, today has emerged as one of Indias leading diversified financial services group. The Edelweiss Group offers one of the largest range of products and services spanning varied asset classes and diversified consumer segments. The Groups product offerings are broadly divided into Investment Banking, Brokerage Services, Asset Management and Financing. The companys research driven approach and consistent ability to capitalize on emerging market trends has enabled it to foster strong relationships across corporate, institutional and HNI clients. Edelweiss Group now employs around 2575 employees after Anagram acquisition, leveraging a strong partnership culture and unique model of employee ownership. It now operates through 327 offices, 33 franchise led offices and over 1300+ sub brokers in all major cities in India after the recent acquisition of Anagram Capital. The Edelweiss Group is a conglomerate of 48 entities including 43 Subsidiaries and 4 Associate companies (December 10), which are engaged in the business of providing diverse financial services. It is a listed company since December 2007 under the symbols NSE: EDELWEISS, BSE: 532922 and Bloomberg: EDEL.IN.

Investment Banking:Edelweiss has one of the most extensive product offerings in Investment Banking in India, catering to different market and client segments. The verticals within Investment Banking include Equity Capital Markets which include IPOs/FPOs, QIPs, Rights and Open Offers, and Advisory services which offer Mergers & Acquisitions Advisory, Private Equity Syndication, Structured Finance Advisory and Infrastructure Advisory. Edelweiss also offers full bouquet of products in Debt Capital Markets including Debt Syndication and broking. Edelweiss enjoys strong franchise with emerging and mid-market companies which is reflected in the # 1 ranking in both Bloomberg tables for Mid-market Private Equity placements in CY2007 and Prime Database league tables for IPOs in Mid-market segment in FY2008. It was adjudged winner in the Best Merchant Banker category in the Outlook Money NDTV Profit Awards 2008. It is ranked # 2 in QIPs and # 3 in ECM (QIP+IPO/FPO+Rights) in FY10 as per Prime Database. For CY10 it is ranked # 1 in

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ECM by number of deals below ` 400 crore as per Prime Database. Its client segments now span from private to public sector and from Mid-caps to Large-caps across different industries.

Broking:Institutional Equities:Edelweiss has one of the leading institutional equities businesses in India backed by a large and experienced research team and a large and diversified client base with a market share of ~5%, among the highest in Indian brokerage firms. Intense servicing, seamless execution and innovative research products have helped Edelweiss build strong relationships with over 300 active institutional investors, including domestic institutional investors and FIIs across different geographies. Edelweiss provides broad corporate access by arranging Investor Conferences every year in different locations across the world with a strong investor and Indian corporate participation. Research coverage presently extends to 185 companies across 20 sectors accounting for over 70% of total market capitalization representing one of the largest Research coverage universe. The quality and caliber of research associated with Edelweiss is widely regarded across the institutional community. It has a strong positioning in Thematic Research identifying large structural themes across sectors, and its India 2020 thematic report issued in March 10 was a recent highlight. It is also considered a Thought Leader in Alternative and Quant Research with over 15 regular products such as pair-trading strategies, corporate action tracker etc. Edelweiss commitment to provide cutting edge research has resulted in a pioneering effort to provide online research to its clients through the portal www.edelresearch.com with smart features of sorting of information, analysis and archiving.

HNI Broking:Edelweiss offers dedicated broking services to high net-worth individuals with a strong emphasis on building long-term relationships with clients. Product offerings include specialized trading execution for active trading clients and structured products backed by high quality execution and reporting.

Retail Broking & Distribution:xxx

Retail Broking and Distribution are the new initiatives of the Group under its Retail Business strategy. The organic Retail broking business is through the online portal www.edelweiss.in and provides advisory and research based broking services supported by high quality execution platform and best in class reporting. It currently has over 90,000 clients under the online broking. Edelweiss has also completed the acquisition of Anagram Capital Limited in July 10. This adds arounds 220,000 clients, over 1300 sub-brokers, 138 own offices and 33 franchise led offices to Edelweiss group. The acquisition is in sync with the existing Retail Strategy of the group with minimal overlap. Distribution business focuses on giving advice and analyzing the best financial product options available in the market. It involves the distribution of the full range of third party financial products and services including IPO syndication for the retail customer. For the calendar year as well as 9 months ended 31st December 2010 Edelweiss is ranked # 1 in HNI category and # 3 in Retail category by amount mobilized in IPOs. It was also ranked # 1 in both HNI and Retail categories in the recent IPO of MOIL Ltd by amount procured.

Wealth Advisory & Investment Services:The Primary focus is on understanding each client's profile including life style, risk appetite, growth expectations, current financial position and income requirements to create comprehensive and tailored investment strategies. The broad range of offerings includes a truly multi-asset class allocation advisory to Structured Products, Portfolio Management, Mutual Funds, Insurance, Derivatives Strategies, Direct Equity, Private Equity, and Real Estate Funds etc.

Asset Management:Alternative Asset Management currently focuses largely on offshore institutional investors offering advisory/management expertise for India focused Multi-Strategy Fund, Real Estate Fund and a Special Opportunities Fund. Recent Initiatives that have been announced include setting up an ARC for which RBI registration has been received. The product portfolio is planned to be expanded by offering a Distress Assets Fund. On the Domestic AMC side, Edelweiss Mutual Fund has launched a mix of 10 schemes across equity and debt funds. The

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current focus of this business is on broad basing the product portfolio and building investment track record.

Financing:With a deep knowledge and understanding of capital markets backed by strong origination capabilities, the Companys primary offering in the financing business includes collateralized loan products such as sponsor funding, loans against shares, IPO financing, loans against ESOPs and margin funding etc. The sponsors of midto- arge corporate constitute its key clientele. Its prudent financing norms, strong risk management and a conservative margin of safety (typical collateral cover ranges from 2x to 3x) ensures low nonperforming loans. Edelweiss continues to work on new product offerings around other asset classes. Edelweiss Housing Finance Limited has recently commenced the business of Home Loan Finance and would help the group diversify the collateral class.

Treasury:The Treasury operations in Edelweiss are similar to that of a Treasury in a Commercial Bank and focus on liquidity management and capital preservation. This business adopts a multi strategy/multi-book approach to diversify and grow its portfolio while imparting liquidity in the balance sheet. The group follows a disciplined and conservative approach to cash management with emphasis on strong risk policies. This has resulted in a low or no correlation between the market returns and the treasury performance.

Corporate Debt Syndication:Debt Syndication Desk focuses on origination, sales, trading and research. It has gained a strong foothold and visibility in the market. Ranked # 2 in CP Placement and Short Term Debt Placement for FY09 Ranked # 4 in CP Placement and Short Term Debt Placement for FY10 Also ranked # 3 in CP placement and Short Term Bonds Placement in 9MFY11

(Rankings as per Prime Database) Its clients in the recent past include large corporates like Reliance Industries, SAIL, REC, PFC, PGC, Tata Capital, Sundaram Finance, Yes Bank, State Bank and Bank of India. xxxii

Growth Initiatives:Edelweiss has announced that it is entering into an agreement with Tokio Marine Holdings, Inc., one of the worlds leading insurance groups headquartered in Japan, to establish a Life Insurance Joint Venture in India subject to regulatory approvals. It has also completed the acquisition of Anagram Capital and it has also launched home loans business recently. It also has received the RBI approval for setting up an asset reconstruction company. These initiatives would lead to long term investment opportunities for the Group in the financial services industry while enlarging its retail footprint.

Highest ShortTerm Credit Ratings:Edelweiss Capital Limited and three other group companies enjoy highest short term rating as under: (As on 31st December 11) E

Entity

Rating Agency

Rating

Edelweiss Capital Limited Long-Term Debt Program me ICRA LAA/LAA- pn/ LAApp/Stable Short-Term Debt Program me CRISIL

P1+
Edelweiss Securities Limited Short-Term Debt Program me CRISIL CRISIL

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ECL Finance Limited Long Term Debt Program me ICRA LAA- pp (SO)/Stable Short-Term Debt Program me Long Term Debt Program me ICRA CRISIL A1+ AA-/AA-r Stable Short-Term Debt Program me CRISIL P1+ P1+

Edelweiss Commodities Ltd. (formerly ECAL Advisors CRISIL Ltd.)

Edelweiss Strengths:1. Brand: Edelweiss the brand, today is a strong franchise in the capital markets backed by a consistent focus on execution and innovation. It constantly emphasizes innovation which is reflected in leadership in new products and asset classes and new client segments. 2. Edelweiss Core Strategic Approach to business is founded on growth with profitability backed by synergistic diversification across the businesses; Control and flexibility of cost, capital and balance sheet, diversified revenue streams, strong risk management and organization build up by developing leadership in bench and investing in culture which rewards thinking about long-term in a partnership cohesive approach. 3. Integrated & Diversified Business Model: Edelweiss derives its strength from a distinct but complementary set of diversified businesses which also protect the Group from any downward cyclical pressures. To this end, Edelweiss continues to look to invest in long term business opportunities in financial services. Its core business diversification xxxiv

approach is based on growth through adjacent markets and through widening the product mix in existing businesses. The synergistic diversification ensures three broad streams of revenue, viz. Agency fee & commission, Treasury operations income and Interest income generate a balanced mix of revenues. 4. Balance Sheet: Edelweiss benefits from a strong and liquid balance sheet with a low leverage. Its focus while managing the Balance Sheet is on strong risk management and capital preservation. A strong capital base of ` 27.90 billion and adequate profitability year after year allows Edelweiss to constantly invest in new businesses with an eye on future growth while scaling up the existing businesses. Edelweiss is also shielded from any adverse asset liability mismatch as its asset-side duration is less than 9 months whereas its liabilities have duration of about 120 months. Low leverage on the balance sheet and highest short term credit ratings allow it ample leeway to lever the balance sheet further. The flexibility in the cost structure enables it to protect the margins, strong risk management focuses on preservation of capital and the group maintains adequate liquidity cushion to ensure smooth business operations across cycles. 5. Edelweiss Business Model is to be able to adjust to downturn in markets with inherent cost flexibility and be able to quickly convert growth opportunities into business when they reappear. Our business growth perspective is aligned to the medium term of 3 to 5 years. 6. Board level Commitment: A board comprising of three independent and one nonindependent nonexecutive director out of a total of six directors, all of whom play a governing role and provide expertise and insight into building Edelweiss into one of the most reputable organizations with an admirable compliance and corporate governance ethos. 7. Management: Edelweiss has an experienced and stable senior management team. We also have a strong middle management team, which comprises of a 50 member Senior Leadership Group and an 80 member Leadership Group forming the bench strength. The four tier leadership pool thus covers over 5% of the total employee strength of the group. Edelweiss constantly emphasizes training and developing leadership and its 100 seater Training Centre at Alibaug (near Mumbai) is now operational.

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8. Employee Ownership: Edelweiss has a widely distributed employee ownership and was among the pioneers in the financial services industry in instituting an employee stock option scheme. It now has one of the largest ESOP pool in the financial services space in India and over 600 employees are covered through ESOPs. The employees including key management own over 50% of the company.

Chapter 5: Objective

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Objective
To know the profile of the client. Meeting customers and convince them for trading. To know the condition of equity market. To pitch the customers for investment in equity. To do a study of different tools of investment.

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Chapter 6: Research Methodology

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Research Methodology
Research Methodology is the science of methods for conducting research work Research methodology is a systematic way, which consists of series of action steps, necessary to effectively carry out research and the desired sequencing to these steps. Formulating the objective of the study Designing the methods of data collection Selecting the sample plan Collecting the data Processing and analyzing the data Reporting the findings

Objective of Study

Research Design Data Collection Sample Size

Hypothesis:For research study, I have consider customers on the basis of their income level and also customer like fresher on job, middle age people and government servant. So on the basis of these consideration I find that fresher and people with high earning are more

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interested in share trading than other people who have entered in their family life. And the case with government employees is that they are happy with whatever they are earning and not interested in investing in stock market due to the fear of losing their money. Companies are now concentrating more on middle class families because Indias most population is middle class and they are more concentrating on saving their money, so its big opportunity for any broking firm to grab the market.

Data Collection:The study was conducted through the use of the primary and secondary data. The various sources of the data collection are mentioned below: Primary data: Through customer survey by means of questionnaire. Secondary data: Through the data of existing client

The present project direct interview with sample element was chosen, so as to make it sure that all probable attempts were made to collect the required information. The project is mainly based on the Primary data collected among the sample elements. Primary data was collected among the samples with the help of a questionnaire. The questionnaire helped me in working on the field and getting a first hand knowledge of the investment market. The process of collection of primary data is turning out to be an enriching experience as the interaction with the investors has given me an insight into the minds of the investors as regards to their demographic profile, household savings, income level, expenditure, asset allocation and risk profile.

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However some of the portion of the report required Secondary data. So it was collected by calling existing client.

Research Tool Applied:The study is conducted through following tools which help to get more important and sufficient data to understand peoples psychology and also help to solve the research problems.

Research Design:A research design is the arrangement of conditions for collection and analysis of the data in a manner that aims to combine relevance to the research purpose with economy in procedure. The research design used for this study is of the descriptive type. Descriptive research studies are those studies which are concerned with describing the characteristics of a particular individual or a group Research design is broadly classified into three types as Exploratory Research Design Descriptive Research Design Causal Research Design For the purpose of the present project the Descriptive type of research design can be said to be most effective and most suitable, because in descriptive type of study the main emphasis is laid down over the existing situations and not over the causes which determine such effects. Thus for that purpose Descriptive type of study has been selected as it seems to be most appropriate to fulfill the objective of the project.

Sample Size:The sample size consisting of 100 respondents were selected for the study. These are people who are in working in good companies, some of them are government employees, some of them are fresher on job, some are student, and some of them high earning salary. So on the basis of these different factors their views are totally different.

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Plan of Analysis:The activity of data analysis should move according to following sub heads:_ Coding: Coding is the process of classifying the information into meaningful categories. (Tabulating and Analyzing data.) Tabulation: Tabulation comprises sorting of the data into different categories and counting the number of cases that belong to each category. Analysis: After this steps data got analyzed based on above findings.

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Chapter 7: Data Analysis and Interpretation

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Data Analysis and Interpretation

Data analysis is the next step after the field survey is over. This portion of the research requires a lot of attention and patience, as the project may be distracted from its objectives very easily if the analysis has not been performed with due care and diligence. In this process all the information received is transformed in to some meaningful form of presentation such as tables or charts. As I took sample size of 100 people. According to their gender, age, salary, professionalism, interest of invest, which firm they would like to invest and further questions asked according to need of research study.

As Sample size 100 out of which 90 are male and 10 are female:Male 90 Female 10

10 %

male female
90 %

Fig no. 1 xliv

Comment From the fig no. 1, we can say that more no. of responses are taken from male person because female are not much aware of the stock market.

Following graph shows the age of respondents and the target respondents were only those individuals whose age is above 25 years:>25 yr 10% 25-30 yr 20% 30-40 yr 25% 40-50 yr 30% <50 yr 15%

< 50 years 15%

> 25 years 10% 25-30 years 20%

40-50 years 30%

30-40 years 25%

Fig no. 2 Comment From the fig no.2, we can say that more no. of responses are taken from those people whose age is above 25 years of age, because they are more interested towards investment, because most of them are earning. xlv

Following graph shows the occupation of the Respondents:Self Employed 9% Businessman 20% Salaried 54% Professionals 17%

OCCUPATION
Self Employed 9% Professionals 17% Salaried 54% Businessman 20%

Fig no. 3

Comment From the fig no. 3, we can say that more no. of responses are taken from salaried person, because they were interested in investing their savings, which help them in improving their financial condition.

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Graph below shows the annual income of the respondents. Only those respondents are considered whose annual income is above 3 lakh rupees per annum. Even the target customers for the company were only those individuals whose annual income is above Rs. 300000 >300000Rs. 7% 3-6 lac 56% 6-10lac 35% <10 lac 3%

ANNUAL INCOME
< 1000000 Rs. Rs. 6000003% 100000 0 35% > 300000 Rs. 7%

Rs. 300000600000 56%

Fig no. 4

Comment From the fig no. 4, we can say that the target customer for the company was the those whose annual income is above 3 lakh, because companys main focus is HNI.

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Following graph shows the different preferred tools of investment by the individuals. The most preferred tool is the Mutual Funds. After the financial crisis and the collapse of stock market many investors had lost their money and their confidence is shacked. Moreover mutual funds are more safer investment instruments in comparison to others and also the rate of return on them is high and even the risk is lower than equities and they are preferred because investing in them exempted from taxation. Mutual funds are followed by the bonds which are risk free and also the rate of return is good. Gold 10% Mutual Funds 37% Bonds 20% Insurance 15% Equity 18%

PREFERRED TOOL OF INVESTMENT IN CAPITAL MARKET

Equity 18% Insurance 15% Gold 10% Mutual Funds 37% Bonds 20%

Fig no. 5

Share Khan is the most preferred broking house followed by the India Bulls and then MotilalOswal broking house. Edelweiss is least preferred because it has just entered into retail segment in March 2008, and it will take some time for it make its presence felt in the xlviii

retail segment. Earlier it was catering only to the HIGH NET WORTH INDIVIUALS (HNIs).

Comment From the fig no. 5, we can say that the most preferred tool is the Mutual Funds. After the financial crisis and the collapse of stock market many investors had lost their money and their confidence is shacked. Moreover mutual funds are more safer investment instruments in comparison to others and also the rate of return on them is high and even the risk is lower than equities and they are preferred because investing in them exempted from taxation. Mutual funds are followed by the bonds which are risk free and also the rate of return is good.

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Graph below shows the responses of the individuals for having demat account.

Yes 45%

No 55%

Fig no. 6

Comment From the fig no. 6 we can say that most of the people dont have demat account.Because of unawareness about stock market.

Graph below shows the responses of the individuals about how much amount they can plan set aside for investment for a year

>25000 60%

25000-100000 30%

above 100000 10%

>25000 25000-100000 above 100000

Fig no. 7 Comment

From fig no. 7 we can say that most of the people prefer to invest less amount because of market condition.

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Graph below shows the responses of the individuals regarding time horizon of their investment

Less than 1 year 20%

1 to 3 year 50%

3 to 5 year 30%

Less than one year One to three year Three to five year

Fig no. 8

Comment From the fig no. 8 we can say that people are prefer to invest for the time period of 1 to 3 year because of high return with low risk.

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Graph below shows the preferred sectors for investment in equities. IT Telecom FMCG Pharma Oil Gas 8% 13% 12% 10% 12% & Real Estate 10% 10% 25% Power Financial

Preferred Sector to invest in Equities

DIVERSIFIED 0% IT 8% FINANCIAL 25% TELECOM 13% FMCG 12% PHARMA 10% OIL & GAS 12% REAL ESTATE 10%

POWER 10%

Fig no. 9 Comment From the fig no. 9, we can say that The most preferred sector is financial sector as it is expected that this sector will grow very fast. The second most preferred sector is Oil & Gas sector because in this sector the major players are the Government owned industries and as the economy will develop the consumption of oil and gas will increase. The third most preferred sectors are FMCG liii

and TELECOM sectors. FMCG sector stocks are the defensive stocks and TELECOM sector is one of the fast growing sectors.

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Chapter 8: Conclusions

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Conclusions
The project I have done is about clients profiling and to convince the client for investment in stock market. From this project I come to the conclusion that in order to pitch any client for the investment we have to first do profiling of the client. Proper profiling of the client help us to pitch the client in a right manner. From this project I also come to know that timing matters a lot in pitching any client. Pitching client at the right time help us to get positive responses. The positive responses which i have received during this project are mostly from those individuals who are doing job.From this project I can conclude that EDELWEISS lack brand image in the market. From this project the important fact I have noticed that in order to get business from any client we need to have follow up, means we need to keep continuous interaction with the client. From this project I also come to know that our personal contacts, references help us a lot in getting good business. As I have mentioned earlier that EDELWEISS lack brand image, I have faced this problem while calling the clients, and also when I went for field work. When I went for filling up questionnaire it was very difficult for me to convince the respondent for provide their personal information like mobile number and email id. It was just because of lack of brand image in the market. Males were more interested towards investing in stock market in comparison females, because of much awareness of stock market. And the most preferable sector of investment in equity was the financial sector,because of their growth rate, growth rate of financial sector is 8.5% per year.

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Chapter 9: Limitations

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Limitations
The information regarding the investors is being collected through market survey where there are some discrepancies on the part of the clients who do not deliver the right information. The questionnaire model sometimes does not suit all the clients. There are changes happening in the industry every time and due to this some of the information collected becomes obsolete or irrelevant for the study. Some of the secondary data collected becomes outdated with the passage of time but overall the information so collected is relevant for the study.

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Chapter 10: Recommendations

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Recommendations
Make the complaint process and complaint redressal process easy, so that there is a scope of improvement. If the customer complaints are handled properly they will again do business with the company. The company should work on building brand image. The company needs to go for aggressive advertisement campaign. Special training about the products of the company to sale team, so that they can increase awareness among the people. The company should not give focus only to HNI clients but also keep track on retail and corporate clients. Attracting customers is more of a concern for Edelweiss because of lot of competition, so they need to come up with various schemes and plans which will pool in more customers. These plans must be beneficial for the customers which will make them give more references, thus increasing customers for Edelweiss which in turn gives the company more revenue. The companys customer service is very poor, as their main focus is attraction of customers. The company prefers only target rather than welfare for employees. The companys stock price once reached to a peak height of Rs.180 per share but at present it down to Rs.33 per share it shows the company has doing well in past but because of recession the FIIs (Foreign Institutional Investors) pull out lot of money, still it was able to sustain its market image. There are many facilities provided by Edelweiss to improve its market value and it is more helpful for customer in satisfaction point of view. As Edelweiss team is doing well to get the business and why this happening because their more intention towards satisfaction of customer. Customer is a person where ever he gets satisfaction he will go towards it and that what Edelweiss is doing. If Edelweiss is continue with this performance, It will not take much time to be a famous broking firm.

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Appendices

QUESTIONNAIRE 1. Personal information.

Name Company Mobile no.

2. Where do you prefer to invest?

Stock Gold Mutual fund Insurance Bonds

3. Do you have demat account?

Yes No

4. What amount do you plan set aside for investment for every year?
Less than 25000 25000-100000 100000 above

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5. Time horizon for your investment is normally?

Less than one year One to three year Three to five year

6. In investment terms you regard yourself as?

Conservative Fairly conservative Average risk More risk

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Bibliography Resources and facilities which I would like to use these are listed below:
Concerned facultys guidance Internet like www.edelweiss.in, Wikipedia Newspaper like Economic Times My knowledge about stock market and experience with customer in Edelweiss Broking Ltd. All the data which I have collected from company and customer perception, thinking towards share trading.

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