COMAPARATIVE STUDY OF EQUITY AND DEBT MUTUAL FUND

OF RELIANCE SECURITIES LTD.

A PROJECT REPORT

SUBMITTED BY

SUBHA LAXMI

MASTER OF BUSINESS ADMINISTRATION

IN

FINANCE

INSTITUTE OF PROFFESSIONAL EDUCATION & RESEARCH

(TECHNICAL CAMPUS), BHOPAL

BARKATULLAH UNIVERSITY, BHOPAL

(MAY-JUNE) 2019

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 ACKNOWLEDGEMENT

I Would like to express my deep sense of gratitude to the respectable guide

distinguished personalities for their precious suggestions and encouragement
during the project.

The experience which is gained by me during the project is essential for me at the
turning point of my carrer.

I am also thankful to MS. SWATI CHAUHAN for providing the guidance and
suggestion.

Last but not the least I would like to thank company officials, my friends & family
members for their constant support.

SUBHA LAXMI

MBA

2
 DECLARATION

This is to certify that, I have completed the Summer Internship Placement

titled “(comparative study of equity & debt mutual fund of reliance securities
ltd.)” under the guidance of “Ms. Swati Chauhan” at Institute of Professional
Education and Research, Bhopal .This is an original piece of work & I have not
submitted it earlier elsewhere .

Date: Signature:

Place: Name:

University Enrollment No:

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 TABLE OF CONTENT

AKNOWLEDGEMENT

DECLARATION

CERTIFICATE BY ORGANITION

CERTIFICATE OF GUIDE

CHAPTER TITLE PAGE

NO. NO.

CHAPTER-1 INTRODUCTION 5-17

CHAPTER-2 OBJECTIVE OF THE PROJECT 18-19

RESEARCH METHODOLOGY 20-25

 RESEARCH PROBLEM
 RESEARCH OBJECTIVE
CHAPTER-3
 SAMPLING DESIGN
 DATA COLLECTION
 LIMITATION OF STUDY

CHAPTER-4 DATA ANALYSIS 26-31

CHAPTER-5 FINDING AND CONCLUSION 32-33

REFERENCES 34

ANNEXURES 35-38

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CHAPTER – 1

INTRODUCTION

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 Reliance Money is promoted by Reliance Capital; one of India's leading
and fastest growing private sector financial services companies, ranking
among the top 3 private sector financial services and banking
companies, in terms o f net worth. Reliance Capital is a part of the
Reliance Anil Dhirubhai Ambani Group. Thus, Reliance Money provides
a comprehensive platform, offering an investment avenue for a wide
range of asset classes. Its endeavor is to change the way India transacts
in financial market and avails financial services. Reliance Money offers a
single window facility, enabling you to access amongst others, Equities,
Equity and Commodity derivatives, Offshore Investments, IPO‟s,
Mutual Funds, Life Insurance and General Insurance products.

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 Vision of Reliance Money

To achieve & sustain market leadership, Reliance Money shall aim for
complete customer satisfaction, by combining its human and
technological resources, to provide world class quality services. In the
process Reliance Money shall strive to meet and exceed customer's
satisfaction and set industry standards.

Mission Statement

“Our mission is to be a leading and preferred service provider to our

customers, and we aim to achieve this leadership position by building
an innovative, enterprising , and technology driven organization which
will set the highest standards of service and business ethics.”

Success sutras of Reliance Money

The success story of the company is driven by 9 success sutras adopted

by it namely Trust, Integrity, Dedication, Commitment, Enterprise,
Hard work, Home work, Team work play, Learning and Innovation,
Empathy and Humility and last but not the least it’s the Network .
These are the values that bind success with Reliance Money.

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THE RELIANCE MONEY OFFERS THE FOLLOWING
SERVICES

 Online Trading in Equities in both cash and derivative segments

through Reliance Securities Ltd, which is a member of both NSE
and BSE

 Online Trading in Commodities through Reliance Commodities

Ltd, which is a member of MCX, NCDEX and NMCE. The services
will be on offer soon.

 Overseas investment will be available through a separate

platform. CFD (Contract for Difference) Platform

 Online / Offline subscription of Initial Public Offerings (IPO).

 Online / Offline buying and redemption of Mutual Funds.

 Online enquiry of all Reliance Money products, namely equity,

commodity, overseas investments, Life and General Insurance
through “Online query” in “Customer Service”.

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  A host of value added services like live news from Dow Jones and
Commodity Control, fundamental and technical research reports,
risk analyzer, personal finance tracker, portfolio tracker, etc.

PRODUCTS OFFERED BY RELIANCE MONEY

Equity Reliance Money offers its clients competitively priced Equity

broking, PMS and Portfolio Advisory Services. Trading execution
assistance provided to clients. In addition Reliance Money provides
independent and unbiased view on markets along with trading
strategies and entry / exit points for taking an informed decision.

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Mutual Funds A mutual fund is a professionally managed fund of
collective investments that collects money from many investors and
puts it in stocks, bonds, short-term money market instruments, and/or
other securities. Reliance Money offers dedicated research & expert
advice on Mutual Funds. Mutual funds are considered to have low risk
factors owing to diversification of assets into various sectors and scripts
or instruments within.

Life-Insurance Reliance Money assists its clients in choosing a

customized plan which will secure the family’s future and their
expenses post-retirement. Clients can choose from different plans of
almost all Insurance Companies where they can invest their money.
Clients can choose from products and services that channelise their
savings and protect their needs while guaranteeing security and returns
for life. A team of experts will suggest the best Insurance scheme which
suits the client’s requirement.

General Insurance General Insurance is all about protecting against all

kind of insurable risks. Reliance Money assists you in areas of Health
insurance, Travel insurance, Home insurance and Motor insurance.

Commodities A single. platform to trade on both the major commodity

exchanges i.e. NCDEX and MCX. In addition In-house research desk shall
provide research reports on all major commodities which shall enable
in getting views for trading and diversify client’s holdings. Trade
Execution assistance is also provided to clients
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Structured Products, Art Investments Structured Products is a new
class of financial products for investors apprehensive of increased
volatility in stock markets. Specially designed products could include
Equity, Index-linked in nature, Real Estate Funds, Art Funds, Overseas
Investments and Infrastructure Investments.

Tax Planning With a view to provide complete wealth management

solutions, Reliance Money’s wealth management offerings include tax
related services like: Tax Planning & advisory Filing Tax returns for
individuals.

Real Estate Advisory Services Broking Model for lease/rent and

buy/sell of property Property Valuation Real-estate Consulting –
Corporate earnings model, Lease rentals, etc.

Trading

SHARE TRADING & D-MAT A/C : Simply put, acquiring equity shares of
a company to the extent of shares that you have acquired. D-mat
account is just like a bank account but the basic difference is that we
keep money in bank account and shares in D-Mat account.

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DERIVATIVES : The term “Derivative” refers to an asset that has no
independent value, but „derives‟ its value from that of an underlying
asset. The underlying asset could be securities, commodities, bullion,
currency, livestock, or anything else.

COMMODITIES TRADING : Now we can trade in commodities and make

money, just like buying and selling shares of companies without owning
an iota of the commodities we trade in. The kind of commodities being
traded are :
Agriculture – based commodities such as rice, wheat, sugar etc.
Mineral – based commodities such as gold, platinum, aluminium,
copper etc.
Energy based commodities such as crude oil.

Gold coins
 DENOMINATION : Available in 0.5, 1,2,5 & 8 ( Weight in grams )
 PURITY : 24 Karat, 99.99% pure gold Swiss Coin ( Valcambi Suisse )
 Fineness : 999.9 ( highest purity that can be achieved in gold).
 Packaging: See – through, tamper –proof packaging with
certificate of purity from Swiss Assayer
 Availability : Reliance Money and Reliance World Outlets

DEMAT ACCOUNT
There are many broking houses doing business in India and they charge
a brokerage on every transaction made online or offline. (Buying and
Selling are treated as separate transaction). Reliance Money’s
advantage over others is that it’s charging the lowest brokerage in the
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market which is just 1 paisa on every executive trade irrespective of the
volume traded. Reliance Money, the brokerage and distribution arm of
Reliance ADA Group, aims to tap investors in the smaller towns and
cities through a flat fee structure.

Advantages offered by Reliance money over other

companies:

 Cost Effective

 Convenience

 Security

 Single Window for Multiple Products

 3 in 1 Integrated Access

 Demat Account with Reliance Capital

 Other Services like research, live news from Reuter and Dow
Jones, etc.

How reliance money scored over others?

1. Two way authentication: Reliance offers its customers with a token

(an electronic gadget) that generates a password, which are a third
level of security in addition to the customer log in and a password
provided. The password generated by the token is valid only for a

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period of 20 seconds. If the web page expires, for the fresh login, a new
password generated by the token has to be keyed in by the customer.

2. Lowest brokerage: Reliance offers the lowest brokerage of 1 paisa

which is very less with respect to the other DPs in the market.

3. User friendly software: The portal offered is very easy to understand

and use.

4. Forex and offshore investment: Reliance provides the offshore

facility which no other AMC is providing in the market.

5. Better research and news: Reliance offers news from the DOW
JONES and REUTERS.

SECURITIES MARKET AND FINANCIAL SYSTEM

 EQUITY

Equity is a share in the ownership of a company. It represents a

claim on the company’s assets and earnings. As you acquire more
stock, your ownership stake in the company increases. The terms
share, equity and stock mean the same thing and can be used
interchangeably. Holding a company's stock means that you are
one of the many owners (shareholders) of a company, and, as
such, you have a claim (to the extent of your holding) to
everything the company owns. Yes, this means that technically,
you own a portion of every piece of furniture; every trademark;

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 every contract, etc. of the company. As an owner, you are entitled
to your share of the company's earnings as well as any voting
rights attached to the stock.

CHARACTERISTICS OF EQUITY

 Equity is unsecured and a high risk-return investment

When you invest your money in a debt investment such as a bank

deposit, bonds, etc., you are promised a fixed amount of interest
on your investment and return of capital. This isn’t the case with
an equity investment. By becoming an owner, you bear the risk of
the company not being successful. However, the rewards for
bearing this risk are high. You, as an equity shareholder, are
entitled to a share in the profits of the company’s business as well
as any appreciation in the perceived value of the shares.

 Equity Remains In Perpetual Existence

The perpetual existence of a company implies that the death, disability,
retirement or termination of a shareholder, director or officer, will not
affect the existence of the company. For an equity shareholder, this is
convenient since he does not need to renew/renegotiate the terms of
his investment (like in the case of a fixed tenure debt investment). He
also has the option to sell his equity holding through the stock
exchange if he no longer wants to remain invested in the company.

 Limited liability
Another extremely important feature of equity is its limited
liability, which means that, as a part-owner of the company, you
are not personally liable if the company is not able to pay its

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 debts. In case of other entities such as partnerships, if the
partnership goes bankrupt, the partners are personally liable
towards the creditors/lender.
 DEBT

Debt instruments are contracts in which one party lends money to

another on pre-determined terms with regard to rate of interest to be
paid by the borrower to the lender, the periodicity of such interest
payment, and the repayment of the principal amount borrowed (either
in installments or in bullet). In the Indian securities markets, we
generally use the term „bond‟ for debt instruments issued by the
Central and State governments and public sector organisations, and the
term „debentures‟ for instruments issued by private corporate sector.

INSTRUMENT FEATURES

The principal features of a bond are:

a) Maturity
b) Coupon
c) Principal

Maturity of a bond refers to the date on which the bond matures, or

the date on which the borrower has agreed to repay (redeem) the
principal amount to the lender. The borrowing is extinguished with
redemption, and the bond ceases to exist after that date. Term to
maturity, on the other hand, refers to the number of years remaining
for the bond to mature. Term to maturity of a bond changes everyday,
from the date of issue of the bond until its maturity.

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Coupon Rate refers to the periodic interest payments that are made
by the borrower (who is also the issuer of the bond) to the lender (the
subscriber of the bond) and the coupons are stated upfront either
directly specifying the number (e.g.8%) or indirectly tying with a
benchmark rate (e.g. MIBOR+0.5%). Coupon rate is the rate at which
interest is paid, and is usually represented as a percentage of the par
value of a bond.
Principal is the amount that has been borrowed, and is also called
the par value or face value of the bond. The coupon is the product of
the principal and the coupon rate.

MARKET SEGMENTS IN DEBT MARKET

There are three main segments in the debt markets in India, viz.,
1. Government Securities,
2. Public Sector Units (PSU) bonds, and
3. Corporate securities.

The market for Government Securities comprises the Centre, State and
State-sponsored securities. In the recent past, local bodies such as
municipalities have also begun to tap the debt markets for funds.

The PSU bonds are generally treated as surrogates of sovereign paper,

sometimes due to explicit guarantee and often due to the comfort of
public ownership. Some of the PSU bonds are tax free, while most
bonds including government securities are not tax-free. The RBI also
issues tax-free bonds, called the 6.5% RBI relief bonds, which is a
popular category of tax-free bonds in the market.

Corporate bond markets comprise of commercial paper and bonds.

These bonds typically are structured to suit the requirements of investors
and the issuing corporate, and include a variety of tailor- made features
with respect to interest payments and redemption
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 CHAPTER- 2

OBJECTIVE OF THE PROJECT

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OBJECTIVE OF STUDY

The primary objective was to analysis the market and find out the
potential customer and motivate or promote them to invest their
money in modern Investment plan rather than traditional Investment
plan.

The secondary objective were:


 To know Equity and Debt market and the customers perception
and the conception about the financial services market.

 To create awareness among the customer

 To create marketing awareness of the Investment product and

also identify the potential customer for this product.

 To analyze the marketing strategy of the competitors

 To analyze Investment pattern of the investor.

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 CHAPTER- 3

RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY

Achieving accuracy in any research requires in depth study regarding

the subject. As the prime objective of the project is compare various
Investment products available in the market with the existing players in
the market and the impact of entry of private players in the market, the
research methodology adopted was basically based on primary data via
which the most recent and accurate piece of first hand information that
could be collected from all possible source. Secondary data was used to
support primary data wherever needed.

Procedure of Research Methodology:

 To conduct this research on the target population was about to

know investment objectives and experience, time horizon, risk
tolerance and financial situation that people are aware or not
aware from Investment in equity and debt market.
 With accurate information that will assist us in providing the best
recommendations that will be suitable for your investment needs
and to reallocate the investments in your portfolio.
 Target geographic area was Bhopal area. Sample size of 100
people was taken
 To these 100 people a questionnaire was given, the questionnaire
was a closed ended questionnaire.
 Some people already have investment plan were also interviewed
to know their prospective.
 Finally the collected data and information was analyzed and
compiled to arrive at the conclusion and recommendation give

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 RESEARCH PROBLEM

 Financial service sector was quite similar in offering and products

and because of that it was very difficult to discriminate between
our product and products of the competitors.
 Target customers and respondents were too busy persons that to
get their time and view for specific questions was very difficult.
 Sensitivity of the industry was also a very frequent factor which
was very important to measure correctly.
 Area covered for the project while doing job also was very large
and it was very difficult to correlate two different
customers/respondents views in a one.
 Every financial customer has his/her own need and according to
the requirements of the customer product customization was
possible.

RESEARCH OBJECTIVE

 The main objective of this project is concerned with getting the

opinion of people regarding the investment in equity and debt and
create awareness while with the generation of leads.

 I have tried to explore the general opinion about stock market. It

also covers why/ why not investors are availing the services of
financial advisors.

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  Along with it a brief introduction to India’s largest financial
intermediary, RELIANCE MONEY has been given and it is shown
that what is trading of stock and how it works.

SAMPLE DESIGN

Sampling procedure:

The sample is selected in a random way, irrespective of them being

investor or not or availing the services or not. It was collected through
mails and personal visits to the known persons, by formal and informal
talks and through filling up the questionnaire prepared. The data has
been analyzed by using the measures of central tendencies like Mean,
median, mode. The group has been selected and the analysis has been
done on the basis statistical tools available.

Sample size:

The sample size of my project is limited to 100 only. Out of which only
44 people attempted all the questions. Other 56 not investing in equity
market nor in debt market.

Sample design:

Data has been presented with the help of bar graph, pie charts, line
graphs etc

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DATA COLLECTION

Data sources: Research is totally based on primary data. Secondary

data can be used only for the reference. Research has been done by
primary data collection, and primary data has been collected by
interacting with various people. The secondary data has been collected
through various journals and websites and some special publications of
R-MONEY.

Primary data was collected using the following

techniques:

 Questionnaire method
 Direct interview method
 Observation method

Sources of Secondary Data:

These source were use to obtain information on, Reliance money and
other competitors history, current issues, policies, procedures etc,
wherever required.

 INTERNET
 MAGZINES
 NEWSPAPERS
 JOURNALS

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LIMITATION

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

 Less success rate

2. Corporate
 Time consuming

 Contacts with higher authorities play a major role

3. Data Collection

 Research has been done only at Bhopal region.

 Some of the persons were not so responsive.
 Possibility of error in data collection.
 Possibility of error in analysis of data due to small sample size.
 Some of the people provide false data as they were scared about
providing actual data

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 CHAPTER- 4

DATA ANALYISIS

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1. Relationship between Age & Tenure of investment

2. Relation between Income & Risk

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3. Relation between Investment & Satisfaction

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4. Relation between age of investor and objective of
investment

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5. Relation between investment & tenure

6. Relation between age of investor & tenure

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31
 CHAPTER- 5

FINDING AND CONCLUSION

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 The income group which fall under the category of 4.5-6 L invest
more money then the other income group.
 The level of satisfaction is more of investor during investment in
mutual fund and in real estate.
 In the long term people usually go for other alternative like real
estate (property)as compared to the financial instrument.
 Younger people invest money for long term as depicted by the
graphs the age group 25 -40, go for long term gain usually.
 Generally people invest in the stock market for high return at
younger age
 Equity investment is high risk and high gain therefore it is mostly
done by the younger age group people for long term investment
and for wealth appreciation.

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References

Websites

 [Link]
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 [Link]
 [Link]
 [Link]
 [Link]
 [Link]
 [Link]
 [Link]
 [Link]

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 ANNEXURES

(Questionnaire)

The purpose of these questions is to assist us in defining your

investment goals by assessing your attitude toward risk and return. This
questionnaire deals with the assets you are considering investing in a
new account and will be a helpful tool in determining your current
investment profile. It will run through a short series of questions
designed to outline your current financial objectives, your time horizon
and the amount of risk you are willing and able to assume. The answers
to these questions will help us determine which strategy may be
appropriate to help you achieve your financial goals.

1. What is the primary objective for these assets(Objective of

Investment)?
 Wealth preservation
 Source of Income
 Capital Appreciation
 Retirement planning/ Education funding/long term wealth
accumulation

2. What is the time horizon you have to achieve your financial goal?
 0-5 years
 6-10 years
 11-14 years
 15 years or longer

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3. What is your present age?
 55 or Over
 Between 45-54
 Between 30-44
 Less than 30

4. What is your monthly income (including interest income)?

 Below 1,50,000
 1,50,000 to 4,00,000
 4,00,000 to 6,50,000
 Above 6,50,000

5. During the next five years, your monthly income will most likely:
 Decline
 Remain about the same
 Increasing slightly
 Increase Significantly

6. Your Preferred Area of Investment:

 Mutual Funds,
 ULIP,
 Shares/Debentures,
 Real Estate,
 Life Insurance Policies,
 Bullion,
 Fixed Deposits,
 Others………...

7. Are you planning any major expenditures greater than 10% of your
investment assets?
 Within the next year

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  Within the next 5 years
 Within the next 5 to 10 years
 None expected

[Link] do you intend to use the income earned by your investment

portfolio?
 Reinvest at least 80% of my earnings
 Reinvest between 20% and 80% of my earnings
 Receive at least 80% of my earnings as income

9. Taking into consideration all sources of income, what is your current

attitude towards your income needs:
 I can forego at least 10% of my current income
 Present income is adequate for present needs
 I need at least 10% more income

10. How many months of living expenses could be safely covered by

your current liquid investments?
 More than 12 months
 Between 4 and 12 months
 Less than 4 months

11. Which of the following investments would you feel most

comfortable with taking into consideration the risk return trade-off?
 Equity securities of established companies
 Mix of equity securities and government bonds
 Government bonds

12. What factor would you consider most important before choosing an
investment?
 How quickly I will be able to increase my wealth.

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  The opportunity for steady growth.
 The amount of monthly income the investment will
generate.
 The safety of my investment principal.

13. Which of the following best describes your reaction if the value of
your portfolio suddenly declined 15%?
 I would be very concerned because I cannot accept
fluctuations in the value of my portfolio.
 I invest for long term growth, but would be concerned about
even a temporary decline.
 If the amount of income I received was unaffected, it would
not bother me.
 I invest for long term growth and accept temporary
fluctuations due to market influences.

14. When it comes to investing in stock or bond mutual funds (or

individual stocks and bonds), I would describe myself as a/an...
 Very inexperienced investor
 Somewhat inexperienced investor
 Somewhat experienced investor
 Experienced investor
 Very experienced investor

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