PROJECT REPORT

On

“A Study on Investment Analysis and Portfolio

Management With Reference to Equity
Market at Bangalore City”

BY

MADHU K N

1NH19MBA73

Submitted to

DEPARTMENT OF MANAGEMENT STUDIES

NEW HORIZON COLLEGE OF ENGINEERING,

OUTER RING ROAD, MARATHALLI,

BENGALURU
In partial fulfilment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Under the guidance of

Mr. SANTOSH KUMAR

Associate Professor
2019 - 21
 CERTIFICATE
This is to certify that MADHU K N bearing USN 1NH19MBA73, is a bonafide student of
Master of Business Administration course of the Institute 2019-21, autonomous program,
affiliated to Visvesvaraya Technological University, Belgaum. The project report on “A
Study On Investment Analysis and Portfolio Management With Reference to Equity
Market at Bangalore City” is prepared by him under the guidance of Prof. Santosh Kumar,
in partial fulfilment of requirements for the award of the degree of Master of Business
Administration of Visvesvaraya Technological University, Belgaum Karnataka.

Signature of Internal Guide Signature of HOD Signature of principal

Name of the Examiners with affiliation Signature with date

1. External Examiner

2. Internal Examiner
INTERNSHIP / PROJECT COMPLETION CERTIFICATE
 DECLARATION

I, MADHU K N hereby declare that the project report on “A Study On Investment Analysis
and Portfolio Management With Reference to Equity Market at Bangalore City” is
prepared by me under the guidance of Prof. Santosh Kumar, faculty of M.B.A Department,
New Horizon College of Engineering.

I also declare that this project report is towards the partial fulfilment of the university
regulations for the award of the degree of Master of Business Administration by Visvesvaraya
Technological University, Belgaum.

I have undergone an industry project for a period of Twelve weeks. I further declare that this
report is based on the original study undertaken by me and has not been submitted for the
award of a degree/diploma from any other University / Institution.

Signature of Student
Place:
Date:
 ACKNOWLEDGEMENT

The successful completion of the project would not have been possible without
the guidance and support of many people.

I am thankful to my internal guide Prof. Santosh Kumar, for his constant

support and inspiration throughout the project and invaluable suggestions,
guidance and also for providing valuable information.

Finally, I express my gratitude towards my parents and family for their

continuous support during the study.

MADHU K N
1NH19MBA73
 TABLE OF CONTENTS

SL. PAGE
NUMBER CONTENTS NUMBERS

1 Executive Summary 1

Chapter 1- Theoretical Background of The

2 2 – 14
Study

3 Chapter 2- Industry Profile & 15 – 23

Company Profile

4 Chapter 3- Research Methodology 24 – 28

5 Chapter 4- Data Analysis and Interpretation 29 – 78

6 Chapter 5 - Summary of Findings,

Suggestion and Conclusion 79 – 80

7 Bibliography 81

8 Annexure 82 – 85

6
 EXECUTIVE SUMMARY
Investment is the employment of funds with the aim of getting return on it. In
general terms, investment means the use of money in the hope of making more money. In
finance, investment means the purchase of a financial product or other item of value with
an expectation of favorable future returns. Investment of hard- earned money is a crucial
activity of every human being. Investment is the commitment of funds which have been
saved from current consumption with the hope that some benefits will be received in
future. Thus, it is ward for waiting for money. Savings of the people are invested in assets
depending on their risk and return demands.

Investment refers to the concept of deferred consumption, which involves

purchasing an asset, giving a loan or keeping funds in a bank account with the aim of
generating future returns. Various investment option are available, offering differing risk –
reward trade off. An understanding of the core concepts and at thorough analysis of the
option can help an investor creates a portfolio that maximizes returns while minimizing
risk exposure. For most of the investors throughout their life, they will be earning and
sending money. Rarely, investor‟s current money income exactly balances with their
consumption desires. Sometimes, investors may have more money than they want to
spend; at other times, they may want to purchase more than they can afford. These
imbalances will lead investors either to borrow or to save to maximize the long-run
benefits from their income.

When current income exceeds current consumption desires, people tend to save the
excess. They can do any of several things with these savings. One possibility is to put the
money under a mattress or bury it in the backyard until some future time when
consumption desires exceed current income. When they retrieve their savings from the
mattress or backyard, they have the same amount they saved. Wide varieties of investment
avenues are now available in India. An investor can himself select the best a venue after
studying the merits and demerits so different avenue. Even financial advertisements,
newspaper supplements on financial matters and investment journals offer guidance to
investors in these selections of suitable investment avenues.
 CHAPTER 1

THEORETICAL BACKGROUND OF THE STUDY

INTRODUCTION

For most of the investors throughout their life, they will be earning and sending
money. Rarely, investor‟s current money income exactly balances with their consumption
desires. Sometimes, investors may have more money than they want to spend; at other
times, they may want to purchase more than they can afford. These imbalances will lead
investors either to borrow or to save to maximize the long-run benefits from their income.

When current income exceeds current consumption desires, people tend to save the
excess. They can do any of several things with these savings. One possibility is to put the
money under a mattress or bury it in the backyard until some future time when
consumption desires exceed current income. When they retrieve their savings from the
mattress or backyard, they have the same amount they saved.

Another possibility is that they can give up the immediate possession of these
savings for a future larger amount of money that will be available for future consumption.
This tradeoffs of present consumption for a higher level of future consumption is the
reason for saving. What investor does with the savings to make them increase over time is
investment. In contrast, when current income is less than current consumption desires,
people borrow to make up the difference.

Those who give up immediate possession of savings (that is, defer consumption)
expect to receive in the future a greater amount than they gave up. Conversely, those who
consume more than their current income (that is, borrowed) must be willing to pay back in
the future more than they borrowed.

The rate of exchange between future consumption (future rupee) and current
consumption (current rupee) is the pure rate of interest. Both people‟s willingness to pay
this difference for borrowed funds and their desire to receive a surplus on their savings
give rise to an interest rate referred to as the pure time value of money.
 This interest rate is established in the capital market by a comparison of the supply
of excess income available (savings) to be invested and the demand for excess
consumption (borrowing) at a given time.

An investment is the current commitment of rupee for a period of time in order to

derive future payments that will compensate the investor.

(1) The time the funds are committed,

(2) The expected rate of inflation, and
(3) The uncertainty of the future payments.

The “investor” can be an individual, a government, a pension fund, or a

corporation. Similarly, this definition individual in stocks, bonds, commodities, or real
estate. This study emphasizes investments by individual investors. In all cases, the investor
is trading a rupee amount today for some expected future stream of payments that will be
greater than the current outlay.

MEANING OF INVESTMENT

Investment is the employment of funds with the aim of getting return on it. In
general terms, investment means the use of money in the hope of making more money. In
finance, investment means the purchase of a financial product or other item of value with
an expectation of favorable future returns.

Investment of hard- earned money is a crucial activity of every human being.

Investment is the commitment of funds which have been saved from current consumption
with the hope that some benefits will be received in future. Thus, it is ward for waiting for
money. Savings of the people are invested in assets depending on their risk and return
demands.

Investment refers to the concept of deferred consumption, which involves

purchasing an asset, giving a loan or keeping funds in a bank account with the aim of
generating future returns. Various investment option are available, offering differing risk –
reward trade off. An understanding of the core concepts and at thorough analysis of the
option can help an investor creates a portfolio that maximizes returns while minimizing
risk exposure.

INVESTMENT ATTRIBUTES

Every investor has certain specific objects to achieve through his long term short
term investment. Such objectives may be monetary/financial or personal in character.

The Three Financial objectives:-

1. Safety and Security of the fund invested(Principal amount)

2. Profitability(Through interest, dividend and capital appreciation)
3. Liquidity(Convertibility in to cash and when required)

These objectives are universal in character as every investor will like to have affair
balance of these three financial objectives. An investor will not like to take under risk
about this principal amount even when the interest rate offered is extremely attractive.
These factors are known as investment attributes.

There are personal objectives which are given due consideration by every investor
while selecting suitable a venues for investment. Personal objectives may be like
provisional for old age and sickness, provision for house construction, provision for
education and marriage of children‟s and finally provision for dependents including wife,
parents or physically handicapped member of the family.

Investment a venue selected should b0e suitable for achieving both the financial and
personal objectives. Advantages and disadvantages of various investments a venue need to
be considered in the context of such investment objectives.

1. Period of Investment: -

It is one major or consideration while selecting a venue for investment. Such period may
be,

a. Short Term (up to one year) - To meet such objectives, investment a venues
that carry minimum or nor risk are suitable.
b. Medium Term(1year to 3years)- Investment a venues that offers better returns
and may carry slightly more risk can be considered, and lastly
 c. Long Term(3years and above)- As the time horizon is adequate, investor can
look at investment that offers best returns and are considered more risky.

2. Risk in Investment: -

Risk is another factor which needs careful consideration while selecting the avenue
for investment. Risk is a normal feature of every investment as investor has to part with his
money immediately and has to collect it back with some benefit in due course. The risk
may be more in some investment a venues and less in others.

Risk connected with the investment are, liquidity risk, inflation risk, market risk,
business risk, political risk etc. Thus, the objective of on investors should be to minimize
the risk and to maximize the return out to of the investment made.

INVESTMENT ALTERNATIVES

Wide varieties of investment avenues are now available in India. An investor can
himself select the best a venue after studying the merits and demerits so different avenue.
Even financial advertisements, newspaper supplements on financial matters and
investment journals offer guidance to investors in these selections of suitable investment
avenues.

Investment avenues are the outlets of funds. A be wildering range of investment

alternatives are available, they fall into two broad categories, wiz, financial assets and real
assets. Financial assets are paper (or electronic) claim on some issues such as the
government or a corporate body. The important financial asters are equity shares,
corporate debentures, government securities and deposit with banks, post office schemes,
mutual fund shares, insurance policies, and derivative instruments. Real assets are
represented by tangible assets like residential house, commercial property, agricultural
farm, gold, precious stones, and art object. As the economy advances, the relative
importance of financial assets ends to increase. Of course, by and large the two forms of
investments are complementary and not competitive.
 Investors are free to select any one or more alternative avenues depending upon
their needs. All categories of investors are equally interested in safety, liquidity and
reasonable return on the fund invested by them. In India, investment alternatives are
continuously increasing along with new developments in the financial market. Investment
is now possible in corporate securities, public provident fund, mutual fund etc.. Thus, wide
varieties of investment avenues are now available to the investors.

However, the investors should be very careful about their hard earned money. An
investor can select the best avenue after studying those merits and demerits of the
following investment alternatives:

1) Shares
2) Debentures and Bonds
3) Public Deposits
4) Bank Deposits
5) Post Office Savings
6) Public Provident Fund(PFF)
7) Money Market Instruments
8) Mutual Fund Schemes
9) Life Insurance Schemes
10) Real Estates
11) Gold-Silver
12) Derivative Instruments
13) Commodity Market(commodities)

For sensible investors should be familiar with the characteristics and features of
various investment alternatives. These are the various investment avenues; where
individual investors can invest their hard earn money.

1. SHARES

Shares mean a share in the share capital of a company. A company is a business

organization. The shares which are issued by companies are of who types i.e., Equity
shares and preference shares. Its ID registers as per Companies Act, 1956. Every company
has share capital. The share capital of a company is divided into number of equal parts and
each of such part is known as a „share‟. A public limited company has to complete three
stages. The first is registration. The second is raising capital and the third is
commencement of business. The public limited company is issue shares to the public for
raising capital. The first public issue is known as initial public offerings (IPO).The shares
can be issued at par, premium or discount. Each shares has a face value of Rs1,2,5or10.In
order to issue shares prospectus is prepare and it is got accrued from Securities and
Exchange Board of India(SEBI).

These shares are listed with the stock exchange so that the share holders can sell
these shares in the market. The company has to make an application to the stock exchange
for listing of shares.

Investment in shares is more risk because the share prices go on changing day by
day. Today, the market is more ‟volatile‟ means more fluctuating. The share price may go
up or go down. If the stock market falls the share prices will go down and the investor will
lose money in the investment. However, there turn on investment in shares is higher. There
turn on investment in shares is in the form regular dividend, capital appreciation, bonus
and rights. There is also liquidity in this kind of investment. The shares can be sold in the
stock market and the money can be collected within 3to4days. Investment in shares is not a
tax saving investment.

Investors in Mumbai are so familiar art of the ups and downs in the stock markets,
but still no one has loosed the confidence over the investment shares. Even as small
investors keeping long term view in mind, are investing some part of their hard earn
money in shares. Many investors are playing in market on the basis of the cash balance or
the margin funding allowed by the depository (service provider). In Mumbai there are two
secondary markets they are as follows,

1. Bombay Stock Exchange(BSE)

2. National Stock Exchange(NSE)

Investors in Mumbai are playing in both the markets i.e., primary market and
secondary market. Shares constitute the ownership securities and are popular among the
investing class. Investment in shares is risky as well as profitable. Transactions in share
take place in the primary and secondary markets. Large majority of investors (particularly
small investors) prefect to purchase shares through brokers and other dealers operating on
commission basis. Purchasing of shares is now easy and quick due to the extensive use of
computers and screen Base Trading System (SBT‟s).

1) DEBENTURES AND BONDS

A debenture is a document issued by a company as an evidence of a debt it is a

certificate issued by a company under its seal, acknowledging a debt dye by it to its
holders.

The term debenture includes debentures stock, bonds and any other securities
issued by a company. The Companies Act provides that a company can raise loans from
the public by issue of debentures. The debentures holder becomes the credit of the
company. The debenture holders get interest on the debenture which is fixed at the time of
issue. The debentures are also issued to the public just like issue of shares. However, there
is a need for credit rating be for issue of debentures are issued by the Private sector
companies. Therefore, bonds may be tax saving but debentures are not tax saving
investment.

The companies use owned capital as well as borrowed capital in their capital
structure as compared to equity shares because debenture holders have no say in the
management of the company and interest on debenture is allowed as a business expense
for tax purposes.

Bonds refer to debt instruments bearing interest on maturity. In simple terms,

organizations may borrow funds by issuing debts securities named bonds, having a fixed
maturity period(more than one year) and pay a specified rate of interest(coupon rate) on
the principal amount to the holders. Bonds have a maturity period of more than one year
which differentiates it from other debt securities like commercial papers, treasury bills and
other money market instruments.

2) PUBLIC DEPOSITS

The Companies Act provides that companies can accept deposits directly from the
public. This mode of raising funds has become popular in the 1990‟s because the bank
credit had become costlier. As per provisions of the Companies Act, a company cannot
accept deposits for a period of less than 6 months and more than 36 months. However,
deposits up to 10% of the paid up capital and free reserves can be accepted for a minimum
period of three months for meetings short-term requirements. Again, a company cannot
accept or renew deposits in excess of 35% of its paid up capital free reserves.

3) BANK DEPOSITS

Investment of surplus money in bank deposits is quite popular among the investors
(particularly among salaried people). Banks (Co-operative and Commercial) collect
working capital for their business through deposits called bank deposits. The deposits are
given by the customers for specific period and the bank pay interests on them. In India, all
types of banks accept deposits by offering interest. The deposits can be accepted from
individuals, institutions and even business enterprises, the business and profitability of
banks deposits collection. For depositing money in the bank, an investor/depositor has to
open an account in a bank.

Different types of deposit accounts are:

1. Current Account
2. Saving banking account
3. Fixed Deposit Account, and
4. Recurring Deposit Account

The rate of interest for Fixed Deposits (FD) differs from bank to bank unlike
previously when the same were regulated by RBI and all banks used to have the same
interest rate structure. The present trends indicate that private sector and foreign banks
offer higher rate of interest. Usually, a bank FD is paid in lump sum on the date of
maturity. However, some banks have facility to pay interest at the end of every quarter. If
one desires to get interest paid every month, then the interest paid will be at a discounted
rate. The Interest payable on Fixed Deposit can also be transferred to Savings Bank or
Current Account of the customer.

4) POST OFFICE SAVINGS

Post office operates as a financial institution. It collects small savings of the people
through savings bank accounts facility. In addition, time deposits and government loans
are also collected through post offices. Certain government‟ securities such as Kinas Visas
Parts, National Saving certificates, etc. Are sold through post offices. New scheme are
regularly introduced by the postal department in order to collect savings of the people.
This includes a recurring deposits, monthly income scheme, PPF and so on.

Postal savings bank schemes were popular in India for a long period as banking
facilities were limited and were available mainly in the eurbanareas up to 1950s. The
popularity of postal savings schemes is now reducing due to the growth of banking and
other investment facilities throughout the country. However, even at present, small
investors use postal savings facilities for investing their savings/surplus money for short
term/long term due to certain benefits likes table return, security and safety of investment
and loan facility against postal deposits.

Even tax benefit is one attraction for investment in post office. Investment in postal
scheme is as good as giving money to the government for economic development along
with reason able return and tax benefits. Post office savings bank (POSB) has a customer
base of more than 11 corers account holders with annual deposits exceeding Rs.
70000crores and a network of 155000branches. The outstanding balance under all national
savings schemes in post office stood at Rs218695.15crore by March 2001

Postal savings schemes include the following:

(1) Savings bank account: simple interest rate 3.5% with effect from March 1, 2003
(the rate was 3.5 from march1, 2002). Maximum deposit up to 150000 individual
account and Rs 1lakh in join account. Interest earned is totally tax free.
(2) Monthly income scheme: period: 6years. Interest rate is 8.00percentp.a payable
monthly. Plus bonus@10percent at maturity with effect from march1 2003. (The
rate was 9percent from march1 2002). There will be no tax deduction at source.
(3) Recurring deposits: period: 5 years. Interest rate 7.5 with effect from March
1,2003. The interest is compounded on quarterly basis. Maturity value is notified
and paid accordingly.
(4) Time deposits: period: 1 year to 5 years. No maximum limit of deposit in an
account. The interest rates on time deposits vary from time to time but it is higher
than other deposits due to long maturity period.

(6) PUBLIC PROVIDENT FUND(PPF)

 PPF is one attractive tax sheltered investment scheme for middle class and salaried
persons. It is even use full to business men and higher income earning people. The PPF
scheme is very popular among the margin alien come tax payers. This scheme was
introduced in 1969.

(7) MONEY MARKET INSTRUMENTS

Money market is a centre in which financial institutions join together for the
purpose of dealing financial or monetary assets, which may be of short term maturity. The
short term generally means a period up to one year and the term near substitutes to money
denotes any financial assets which may be quickly converted into money with minimum
transaction cost.

Thus, money market is a Market for short term financial instruments, maturity
period of which is less than a year. The deals are over the counter. The numbers of players
in the market are limited. It is regulated by reserve bank of India. Money market
instruments where investors can invest are treasury bills, certificate of deposit, commercial
paper, repurchase options (repo), money market mutual funds (MMMFs).

(8) MUTUAL FUNDS

A mutual fund is a financial in term diary which collects savings of the people for
secured and profitable investment. The main function of mutual fund is mobilizing the
savings of the general public and invest them in stock market securities. The entire income
of mutual fund is distributed among the investors in proportion to their investments –
expense for managing the fund are charged to the fund, like mutual funds in India are
registered as trusts under the Indian trust act. The trustees are appointed and they look after
the management of the trust. They decide the investment policy and give the benefit of
professional investment through the mutual funds. These funds are managed by financial
and professional experts. The savings collected from small investors are invested in a safe,
secured and profitable manner. Therefore, it is said that mutual fund is a boon to the small
investors.

Investors are creating their mutual fund portfolio son the basis of the nature of
mutual funds i.e. instead of categorizing the mutual funds in different types(as given
above) investors mainly focus on the following categories which simple to understand and
the schemes itself explain the risk factors associated with the particular category.

1. Equity mutual funds: these funds invest a maximum part of their corpus into
equities holdings. The structure of the fund may vary different for different
schemes and the fund manager‟s outlook on different stocks. The equity funds are
sub- classified depending upon their investment objective, as follows:
(a) Diversified equity funds (large cap)
(b) Mid – cap funds
(c) Small cap funds
(d) Sector specific funds
(e) Tax savings funds(ELSS)
(f) Thematic funds

Equity investment are meant for a longer time horizon, thus equity funds rank high on the
risk – return matrix

2. Debt mutual funds: the objective of these funds is to invest in debt papers.
Government authorities, private companies, bank and financial instruments are
some of the major issuers of debt papers. By investing in debt instruments, these
funds ensure low risk and provide stable income of the investors. Debt funds are
further classified as:
(a) Gilt funds
(b) Income funds
(c) MIPs
(d) Short term plans
(e) Liquid funds

Balanced funds: as the name suggests them, area mixes of both equity and debt funds.
They invest in both equities and fixed incomes securities, which are in line with pre-
defined investment objective of the scheme. These schemes aim to provide investors with
the best of both the worlds. Equity part provides growth and the debt part provides stability
in returns

9) LIFE INSURANCE POLICIES

 Nothing is more important to a person than the feeling that their family is
financially secure-at all times. “Life insurance is a contract where by the insurer, in
consideration of premium paid either in a lump sum or in periodical installments
undertakes to pay an annuity or certain sum of money either on the death of the insured or
on the expiry of a certain number of years, whichever is earlier.”

There are 24 life insurance companies in India. Life Insurance Corporation of India
(LIC) is the only Public Sector insurance company, the rest all being private insurance
players. Most of the private players have tied up with international insurance biggies for
their life insurance foray. The life insurance sector in India has seen a lot to faction in the
last decade with a lot to new players entering the market. The distribution system for life
insurance products involves various intermediaries between the insurer and the insured.
The different distribution channels used by insurance companies are Agents, Brokers,
Corporate Agents, Bank assurance. Private insurance companies have been exploring the
various distribution channels available instead of concentrating on individual agents.

10) INVESTMENT IN REAL ESTATES

Investment in real estate includes properties like building, industrial and,

plantations, farm houses, agricultural and near cities and flats or houses. Such properties
attract the attention of affluent investors. It is an attractive, as well as profitable investment
avenue today. A residential building represents the most attractive real estate property for
majority of investors. The prices of real estate are increasingly day by day. The land is
limited on the earth but the population has been increasingly. As the demand increases but
the supply of land is limited, the prices tend to increase. Therefore, it is attractive
investment which generates higher return during a short period of time.

11) INVESTMENT IN GOLD AND SILVER

Gold and silver are the precious objects. Everybody likes gold and then requires
gold or silver. These two precious metal are used for making ornamentals and also for
investment of surplus funds over king period of time. In India, gold is an obsession deep-
rooted in mythology, religious rites and ditties very psychological. In every family at least
a little equinity of gold and silver available. Some people buy the metals as a investment.
The prices of fold and silver are also increasing continuously. The prices also depend upon
demand and supply of gold. The supply has been increasing at low speed. However, the
demand has been increasing very fast. Therefore, the prices also go on increasing. People
use gold and silver at the time of marriages and other festivals. A part from gold and silver,
precious stones such as diamonds, rubies and pearls are also appealing for long term
investment particularly among rich people.

(12) DERIVATIVE INSTRUMENTS

A derivative is a product whose value is derived from the value of an underlying

asset, index or reference rate. The underlying assets can be equity, fore, commodity or any
other assets. For example, if the settlement price of a derivative is based on the stock price
of a stock for e.g. Tata steel which frequently changes on a daily basis, then the derivative
risks are also changing on a daily basis. This means that derivative risks and positions
must be monitored constantly. A derivative security can be defined as a security whose
value depends on the values of other underlying variables. Very often, the variables
underlying the derivative securities are the price of traded securities. Derivatives are of
four types, (1) forward (2) futures (3) options and (4) swaps. From the point of view of
investments and portfolio managers, futures and options are the two most important
derivatives. They are used for hedging and speculation. Trading in these derivatives has
begun in India. The difference between a share and derivative is that shares/securities are
an assets while derivative instrument is a contract.

(13) COMMODITIES

A commodity may be defined as a product or material or any physical substance

like food grains, processed products and agro- based products, metals or currencies, which
investors can trade in the commodity market. One of the characteristics of a commodity is
that its price is determined as a function of its market as a whole. Well-established
physical commodities are actively traded in spot and derivative commodity market.
Commodities actually offer immense potential to become a separate asset class for market-
savvy investors, arbitragers and speculator.
 CHAPTER 2

INDUSTRY PROFILE

INTRODUCTION

“Portfolio means combined holding of many kinds of financial securities i.e.,

shares, debentures, governments bonds, units and other financial assets. “The term
investment portfolio refers to the various assets so of an investor which are to be consider
as a unit. It is not merely a collection of unrelated assets but a carefully blended asset
combination within a unified frame work. It is necessary for investors to take all decisions
as regards their wealth position in a context of portfolio. Making portfolio means putting
one eggs in different baskets with varying element of risk and return. The object of
portfolio is to reduce by diversification and maximize gains.

Thus, portfolio is a combination of various instruments of investment combination

of securities with different risk-return characteristics. The object of portfolio is to reduce
risk by diversification and maximize gains.

PORTFOLIO MANAGEMENT

Portfolio management means selection of securities and constants shifting of the

portfolio in the light of varying attractiveness of the constituents of the portfolio. It is a
choice of selecting and revising spectrum of securities to it in with the characteristics of an
investor. Portfolio management includes portfolio planning, selection and construction,
review and evaluation of securities. The skill in portfolio management lies in achieving a
sound balanced between the objectives of safety, liquidity and profitability.

Timing is an important aspect of portfolio or evasion. Ideally, investors should sell

market tops and buy at market bottoms. Investors may switch from bonds to share in a
bullish market and vice-versa in a bearish market.

Portfolio management is all about strengths, weakness, opportunities and threats in

the choice of debts vs. Equity, domestic vs. International, growth vs. Safety, and many
other trade offence counter in the attempt to maximize return at a given appetite for risk.
 Portfolio management is an art and science of making decisions about investment
mix and policy, matching investment to objective asset allocation for individuals and
institutions, and balancing risk against performance.

OBJECTIVES OF POROTFOLIO MANAGEMENT

1. Security/Safety of Principal: Security not only involves keeping the principal

sum intact but also keeping intact it purchasing power intact. In order to
provide safety, a careful review of economic an industry trends is necessary. In
other words, errors in portfolio are unavoidable and it require extensive
diversification. Even investor wants that his basic amount of investments
should remain safe.
2. Stability of Income: So as to facilitate planning more accurately and
systematically there investment consumption of income is important.
3. Capital Growth: This can be attained by reinvesting in growth securities or
through purchase of growth securities. Capital appreciation has become an
important investment principle. Investors seek growth stock which provides a
very large capital appreciation by way of rights, bonus and appreciation in the
market price of a share.
4. Marketability: It is the case with which a security can be bought or sold. This is
essential for providing flexibility to investment portfolio.
5. Liquidity i.e., nearness to money: It is desirable to investors as to take
advantage of attractive opportunities up coming in the market.
6. Diversification: The basic objective of building a portfolio is to reduce risk of
loss of capital and or income by investing in various types of securities and
over a wide range of industries.
7. Favorable Tax status (Tax Incentives): The effective yield an investor gets form
his investment to which it is subject. By minimizing the tax burden, yield can
be effectively improved. Inventory to minimize their tax liabilities from the
investments. The portfolio management has to keep a list of such investment
avenues along with the return risk, profile, tax implications, yields and other
returns. Investment programmers without considering tax implications may be
costly to the investor.
PORTFOLIO MANAGEMENT PROCESS

Portfolio management is on-going process involving the following basic tasks:

i. Identification of the investor‟s objectives, constraints and preferences.

ii. Strategies are to be developed and implemented in tune with investment policy
formulated.
iii. Strategies are to be developed and implemented in tune with investment policy
formulated.
iv. Review and monitoring of the performance of the portfolio.
v. Finally the valuation of the portfolio and make some adjustments for the future.

MEARCHANAT BANKING INVESTMENT BANKING

A merchant bank is a financial institution primarily engaged in offering financial services

and advice to corporations and to wealthy individuals. The term can also be used to
describe the private equity activities of banking. The chief distinction between an
investment bank and merchant bank is that a merchant bank invest its own capital in a
client company whereas an investment bank purely distributes (and trades) the securities of
that company in its capital raising role. Merchant banking services are provided by the
financial institutions, subsidiaries of many commercial banks and by the private sector.
The activities that merchant bankers are authorised to perform are listed by the SEBI and
include issue management, loans syndication, lease financing, corporate advisory services,
portfolio management services and manager or consultants to public issues.

NEED FOR DESIGNING AN INVESTMENT PORTFOLIO

There are large numbers of savers in India. It is also surprising that the saving rate
in India is as high as 32% of GDP per annum and investment at 34% of GDP. High levels
of investment could not generate comparable rates of growth of output because of poor
investment strategy, low productivity of capital and high rates of obsolescence of capital.
Thus, the use of capital in India is wasteful and inefficient. The portfolio managers lack the
expertise and experience.
 The average India households save around55% in financial form and 45% in
physical form. As per latest RBI data, savings in the financial form is held 64% in cash and
bank deposits which gives negative real returns. Around 24% of financial savings is held
in the form of insurance, Provident Fund, Pension Funds and 5% is in Government
Securities like post offices savings, NSCs, Public Provident Funds, and National Savings
Schemes etc. The investment in capital market instrument is around 6% of the total
financial savings. Their objectives are capital appreciation, safety market ability, liquidity
and hedge against inflation. Therefore, portfolio management becomes desirable. Indian
markets are developing and all the basic principles and theories of portfolio management
would apply in the market.

POPULARITY OF EQUITY PORTFOLIO MANAGEMENT

SERVICES

Portfolio Management Services (PMS) is a professional service rendered for

management of portfolio of others with the help of experts in Investment advisory
services. Portfolio management is an art and requires high degree of expertise. The SEBI
has set out guidelines in which the relationship of the client and the portfolio manager and
their respective rights and duties of both have been set out. The job of the portfolio
manager in managing the client‟s fund become challenging and difficult due to the
multitude of obligations laid on his shoulders by the SEBI, in respect of their operations,
accounts and audit.

Thus, portfolio management has become a complex and responsible job which
requires an in-depth training and expertise. Through the mechanism of stock exchanges.
There has been a substantial growth of capital market in India during the last 25 years.
There are 23stock exchanges in India ad more than 9500 listed companies. There were
56,588 capital issues and the market value of capital was Rs.12, 01,207 cores still 2004-05.

As per SEBI regulations, only those who are registered with SEBI are eligible to operate as
a portfolio manager. They have to pay required license fees. Necessary infrastructure with
professionally qualified persons and minimum net worth of Rs.50lakhs. The SEBI has
imposed a number of obligations and code of conduct on the portfolio managers.
TYPES OF PORTFOLIO MANAGEMENT

When it comes investing they are many option available to individuals A person
can investment bonds mutual fund etc. Once a person invest in multiple product
performance need to be tracked made ensure the investor the most profit
possiable.According to investor awareness, it is a term that describe all investment owned
maintain adverse portfolio helps to mitigate loss because the investor has not placed all for
their eggs in ones basket. There are different types of investment portfolios. Perhaps the
most common type individuals are exposited to are: conservative, Balanced and
Aggressive Growth.

A portfolio is a combination of different investments assets mixed and matched for the
purpose of achieving an investor‟s goals. Include any asset that they own-from real item
such as art and real estate, to equities, fixed-income instruments and their cash and
equivalents. For the purpose of this section, investors will focus on the most liquid asset
types: equities, fixed-income securities and cash equivalents. The asset mix they choose
according to their aims and strategy will determine the risk and expected return of their
portfolio.

1. Aggressive Investment Portfolio

In general, aggressive investment strategies-those that shoot for the highest possible
return-are most appropriate for investors who, for the sake of this potential high return,
have a high risk tolerance and a longer time horizon. Aggressive investment portfolio
generally has a higher investment in equities. This type of portfolio may incorporate
mutual funds that aim for high capital gain, equities, stocks, bonds, and cash and may
become commodities. In the short-term, growth will be very small and some loss will be
observed. An actively trade aggressive portfolio will topically gain maximum returns for
the investor. The loss factors why only individuals who are willing to take a high financial
risk should seek an aggressive in growth portfolio will invest approximately 100% if it‟s
total assets in equity securities. The Aggressive Growth Portfolio can invest up to 100% of
its total assets in equity securities and up to 25% of its total assets in fixed income
securities.

2. Balance or Moderate Investment Portfolio

A moderately aggressive portfolio is meant for individuals with along longer time
horizon and an average risk to tolerance. Investors who find these types of portfolio
attractive are seeking to balance the amount of risk and return contained within the fund.

The portfolio would consist of approximately 50-55% equities, 35-40% bonds, and 5-
10% cash hand equivalents.

The moderate portfolio‟s primary investment objective is to seek long-term capital

appreciation and also the moderate portfolio seeks current income.

3. Conservative Investment Portfolio

The Conservative investment strategies, which put safety at a high priority, are most
appropriate for investors who are risk averse and have a shorter time horizon. Conservative
portfolios will generally consist mainly of cash equivalents, or high-quality fixed-income
instruments. The main goal of a conservative portfolio strategy is to maintain the real value
of the portfolio, or to protect the value of the portfolio against inflation. The portfolio
shown below would yield high amount of current income from the bonds and would also
yield long-term capital growth potential from the investment high quality equities.

The conservative investment portfolio is geared towards preserving capital. A minimal

risk investment strategy issued. This type of portfolio is deal for retirees who are focused
more on having assets available than a stream of income from interest. Since the primary
goals list to preserve capital, investors can into principal to supplement living expenses
instead of relying growth on the portfolio‟s earned income. The Conservative Portfolio‟s
primary investment objective is to seek preservation of capital and current income. The
conservative portfolio also seeks capital appreciation. Under normal market conditions, the
conservative portfolio will invest approximately 65% of its total assets in equity securities.
The conservative portfolio can invest up to 100% of its total assets in fixed income
securities and or some time up to 20% of its total assets in equity securities.
NEED AND IMPORTANCE OF PORTFOLIO MANAGEMENT

Portfolio management is a process encompassing many activities of investment in

assets and securities. It is a dynamic and flexible concept and involves regular and
systematic analysis, judgment and action. The objectives of this service to help the
unknown and investors with the expertise of professionals in investment portfolio
management. It involves reconstruction of a portfolio based upon the investor‟s objectives,
constraints, preferences for risk and returns and tax liability.

The evaluation of portfolio is to be done in terms of targets for risk and returns.
The exchanges in the portfolio are to be effect to meet the changing condition.

Portfolio construction refers to the allocation of surplus funds in hand among a

variety of financial assets open for investment. Portfolio theory concern itself with the
principles governing such as allocation. The modern view of investment is oriented more
go towards the assembly of proper combination of individual securities to form investment
portfolio.

A combination of securities held together will give a beneficial result if they

grouped in a manner to secure higher returns after taking into consideration the risk
elements. The modern theory is the view that by diversification risk can be reduced.
Diversification can be made by the investor either by having ad large number of shares of
companies in different regions, indifferent industries or those producing different types of
product lines. Modern theory believes in the perspectives of combinations of securities
under constraints of risk and returns.

FINANCIAL PLANNING PROCESS

Financial planning is must for every house hold. Financial planning goes beyond
savings. It is an investment with a purpose. It is a plan to save and speed future income. It
should be carefully budgeted. Financial planning is the process of meeting investor‟s life
goals through proper management of their finances. Life goals can include buying a house,
saving for their child‟s higher education or planning for retirement.

In today‟s world it was found that people living beyond their means, having credit
card debt, making risky investments and doing things that are irresponsible and against the
basic principles of financial planning. Further the pro real returns. Around life ration of
new and often complex financial products demands more financial expertise. Also
turbulent conditions and changing tax laws compound the need for adequate financial
planning. Thus it has become inevitable for all to get into financial planning and
understanding financial products.

Financial planning envisages both short term and long term savings. A portion of
the savings in invested in certain assets. There are various investment options in the form
of assets: bank deposits, government saving schemes, shares, mutual funds, insurance,
commodities, bonds, debentures, company fixed deposits etc.

Financial planning is not something that happens by itself. It requires focus and
discipline. It is a six step process that helps investor takes a big picture‟ look at where
investor is and where investors want to be financially.

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

Securities and exchange board of India (SEBI) has been established with the prime
mandate to protect the interest of investors in securities. It is also mandated to promote the
development of, and to regulate the securities market. The securities market enables capital
formation in the economy and enhances wealth of investors who make the right choices.
The investor confidence is the key prerequisite for the emergence of a vibrant and deep
capital market. The role of regulator in creating and enhancing investor confidence is,
therefore, paramount.

Accordingly, securities and exchange board of India (SEBI) was set up by an act of
parliament of India in April, 1992 with a mandate to

(a) Protect the interest of investors

(b) Promote the development of and
(c) Regulate the securities market

1) Market regulation :

SEBI prescribes the conditions for issuer companies to raise capital from the pubic
so as to protect the interest of the suppliers of capital (investors). The extensive disclosures
prescribed for issuers facilitate informed investment decision making by investors while
simultaneously ensuring quality of the issuer. Further, it has prescribed norms for such
corporate on „ongoing basis and also during their restructuring (like substantial
acquisition, buy back and delisting of shares) to safeguard to interest of investors. To
ensure fair and high standards of service to investor, SEBI allows only fit and proper
entities to operate in the capital markets as intermediaries. In this regard, it has prescribed
detailed and uniform norms of their registration.

2) Market development:

On an ongoing basis, SEBI initiates measures to widen and deepen the securities
markets by bringing changes in market micro and macrostructure. The major market
development measures undertaken by SEBI include shift from the non transparent open
outcry system to the transparent screen based on line trading system, elimination of
problems of physical certificates by shifting to electronic mode (demit), implementing
robust risk management framework in stock market trading etc. Further, public comments
are invited before implementation of major changes, rendering the whole process
participative.

3) Investor protection :

The above mentioned regulatory framework and the market development measures
of SEBI are invariably geared towards protecting the interest of investors. Besides, SEBI
also has comprehensive mechanism to facilitate red resale of investor‟s grievances.
Redressal (arbitration at stock exchanges) and to compensate investors have also been
provided.

4) Enforcement :

SEBI ascertains compliance to its norms by carrying out inspections of registered

intermediaries, complaints. SEBI is vested with the power of civil court to call for
information and records, to issue summons, to inspect and to investigate entities associated
with securities markets. Apart from these civil proceedings, SEBI also launches criminal
proceedings against entities for breach of norms. All such orders 0f SEBI are available in
the website (www.sebi.gov.in), serving as a warning to potential defaulter.
 CHAPTER 3
RESEARCH METODOLOGY
Investment is the employment of funds on asset aim of earning income or capital
appropriation investment to attributes namely time and risk present consumption is sacrifice
to get a return in the future. Sacrifice that as to be borne is certain but the return in the future
may be uncertain this attribute of investment indicates the risk factors. The risk is
undertaken view to rape some returns from the investment layman investment means some
monitory commitment. A person commitment to buy a flat or a house for is personal use
may be an investment from is point of view. This can‟t be considering as an actual
investment is it involves sacrifice but does not yield any financial returns.

Investment analysis and portfolio is challenging for the two main reasons, firstly,
the subject embraces diversified fields including managerial finance, accounting,
economics, statistics and mathematics; seconds it provides operate unit to apply investment
theories and concept to find solution to real world investment problems.

Those invest may be depended as “a commitment of funds made in the expectation

of some positive rate of returns”. Expectation of return is an essential element of investment.

REVIEW OF LITERATURE

1. Punithavathy Pandean,
Security analysis and portfolio management, Vikas publications
Pvt. New Delhi. 2001
The seasoned professionals find it challenging to invest in stock markets. Students
also find the topic of security analysis and portfolio management complicated. The book
gives readers theoretical clarity and exhaustive coverage with an approach suitable for
students. It has been written for postgraduate students studying management and commerce.
It aims to throw light on this difficult subject. This book has been separated into three parts.
The first part gives details on the Indian stock market, the second part entirely focuses on
the different aspects of security analysis and the third part has been devoted to portfolio
analysis.
2. Yogis maheshwari, INVESTMENT MANAGEMENT, PHI, Delhi, 2011:
Investment is the employment of funds on assets with the aim of earning income or
income or capital appreciation investment has two attributes namely time and risk.
Present consumption is sacrificed to get a return in the future. Portfolio
management means selection of securities and constant shifting of the portfolio in the light
of varying attractiveness of the constituents of the portfolio. It is a choice of selecting and
revising spectrum of securities to it in win the characteristics of an investor.

3. Ballad VK, INVESTMENT MANAGEMENT: SECURITY ANALYSIS AND

PORTFOLIO MANAGEMENT, S Chan, New Delhi, 2009 :

Investment management: security analysis and portfolio management describes

techniques, vehicles, and strategies for planning, implementing, and overseeing the
optimal allocation of these are related to the financial position of the investor and his
ability to assume risk. The focus of this part is on the operations of the Indian stock
markets and financial development in India, over- the counter exchange of India, national
stock exchange of India and overall developments in the secondary capital market. He
funds of an investor(s) and/or an institution(s) in the changing investment environment.

4. Prison Chandra, PORTFOLIO MANAGEMENT, Tata McGraw Hill, New Delhi:

Investment and provides a guided tour of the intricate and complex world of
investments. Written by a highly acknowledged author and expert , this book: describes a
characteristics of various investment alternatives available to investors discusses how the
securities market functions explains the techniques used by professionals for analyzing and
valuing investment alternatives discusses the implications of modern research in the field of
investment.

5. Active port portfolio management, Richard C Grirnold, Ronald N Kahan

McGraw Hill, 2000

Why a second education? Why take time from busy life? Why devote the energy to
improving an existing text rather than writing an entirely new on? Why do with success?
 The short answer is “over readers. We have been extremely gratified by active
portfolio managements reception on the investment community .the book seems to be on
the self of every practicing or aspiring quantitatively orientted investment manager, and
the shelves of many fundamental portfolio managers as well.

STATEMENT OF THE PROBLEM

The individual investor‟s portfolio, we find that its properties are markedly
different from those of an institutional investor. The reason is taxes, which have a number of
profound effects on the portfolio. Terminologies vary, but for practical purposes we can
consider the individual investor to be either affluent or high net worth. For the affluent
investor, total economic resources are of roughly the same magnitude as the claims on those
resources resulting from the investor‟s life choices. Having identified some aspects of the
problem facing an individual investor and the incentives for addressing those issues, let us
briefly sketch a more adequate framework for addressing them.

OBJECTIVES OF THE STUDY

 To study and understand the concept of investment and portfolio management.

 To study on various avenues of the investment.
 To understand the various theories of portfolio management.
 To propose bench mark practices for fund allocation and investment strategies to
the investors.

SCOPE OF THE STUDY

The project is undertaken on monitoring the performance of portfolio by

incorporating the latest market conditions. Identification of the investor‟s objectives,
constraints and preferences.

RESEARCH METHODOLOGY

Research methodology adopted for the purpose of study is descriptive and survey
based in nature.
 SOURCES OF DATA COLLECTION

Primary data
Primary data for the study is collected through personal interview and structured
questionnaire.

Secondary data
Secondary data is collected from web portals, research papers, magazines and financial
news.
SAMPLING
Sampling method used for the study is simple random sampling. Sampling size of 75
respondents is selected for the purpose of the study.

OPERATIONAL DEFINITIONS

 Fiscal policies: fiscal policy is the use of government revenue collection and expenditure of
influence the economy.
 Monetary policies : monetary policy is the process by which the monetary authority of a
country, typically the central bank or currency board, controls either the cost of very short
term borrowing or the monitory base, often targeting an inflation rate or interest rate to
ensure price stability and general trust in the currency
 Flow of fund: flow of fund accounts are used to track the flow of money to and from
various sectors of a national economy.
 Financial market: financial market is a market in which people trade financial securities
and derivatives and precious metals.
 Speculation: investment in stocks, property etc in the hope of gain but with the risk of loss.
 Sentimental indicators: sentimental indicator refers to a graphical or numerical indicator
designed to show how a group feels about the market or economy.
 Bull market: a market in which share prices are rising, encouraging buying.
 Bear market: a market in which share price are falling, encouraging selling.
 PLAN OF ANALYSIS

Collected data is analyzed with the help of table and charts. Certain statistical tools
like various analyses, standard deviation apart from the regular tools are used for further
simplifying the data and drawing a conclusion.

LIMITATIONS OF THE STUDY

 The view of respondents are subjected to their basis and per justice.
 The findings of the study cannot be generalized.
 Study is conducted in Bangalore city.
 The research periods is very short, therefore, time constraint could be a limiting factor.
 This study would be relevant for a period of 6 months to 1 year only due to the changing
and dynamic market solutions.
 CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

RESPONDENTS POFILE

Table: - 01

The table showing Age group of the respondents.

Particulars No of respondents Percentage of respondent

(%)
10-20 0 0

20-30 16 73.3

30-40 55 21.3

40 above 4 5.4

Total 75 100

(Source: Primary Data)

Analysis: -

From the above table it is analyzed that the73% respondents are below
the age group of 20- 30 age years, 21.3% are in the age group of 30-40 years
and 5.4% of the respondents are in the age group of 40 and above.
 GRAPH 01

The Graph showing the Age group of the respondents:

Interpretation: -

From the above graph inferred that majority of respondent are beloning
to the group of 20-30 years and 2nd large respondent group is between 30-40
age group and less number of respondents are above 10-20.
Table: - 02

The table showing the gender of Respondents:

Gender respondents Number of Percentage (%)

Respondents
Male 42 56

Female 33 44

Total 75 100

(Source: Primary Data)

Analysis: -

Form the above table data is analyzed that the respondent group in the
respondent is belong to the male category that is 56% and the female
respondents are less that is 44% as compare to male respondents.
 Graph: - 02

The graph showing the gender of respondents:

56%

44%

Male Female

Interpretation: -

From the above graph it is inferred that the majority of respondent are
belong to the male category is more compare to female.
Table: - 03

The table showing the Occupation of the respondents:

Particulars Number of Respondents Percentage(%)

Business 16 21.3

Salaried person 17 22.7

Profession 12 16
Others 30 40
Total 75 100

(Source: Primary Data)

Analysis: -

From the above table it is analyzed that the respondents are

belonging to business people that is 21.3%, the salaried person are 22.7%, the
professions is 16% and others are 40%, in this table analyzed the occupation
of other workers are more as compare to business persons.
Graph: - 03

The table showing Occupation of the respondents:

Interpretation:

From the above graph it is inferred that majority of occupational

respondent are belonging to the business class and 2nd large group is salaried
people.
Table: - 04

The table showing income level of the respondents:

Particulars NO OF RESPONDENTS PERRCENTAGE(N75)

15,000-20,000 29 42.6

20,000-25,000 9 13.2

25,000-30,000 19 27.9

35,000-&Above 19 16.2

Total 75 100

(Source: Primary Data)

Analysis: -

From the above table it is analyzed that the income level of the
respondents are 15000-20000 that is 42.6% more and 20000-25000 that is
13.2%is less.
Graph: - 4

The Graph showing the income level of respondents

Interpretation:

From the above graph it is inferred that majority of income levels of

respondents are more in 15000-20000, And less in 20000-25000 income
level.
TABLE 5
The table showing about working is according to respondent qualification and skill:

Option No of Respondent Percentage (%)

Strongly agree 30 40

Agree 17 22.7

Disagree 12 16

Strongly agree 16 21.3

TOTAL 75 100

(Source: - Primary Data)

Analysis:

From the above table shows that the in the respondents 40%
respondents are strongly agree for working is working to respondent‟s
qualification and skills.
GRAPH: - 5

The Graph showing about working is according to respondent‟s qualification

and skill:

Chart Title
100%

90%

80%

70%

60%

50%

40%

30%

20%

10% Category 1 Category 2 Category 3 Category 4

0% Series 1Series 2Series 3

Interpretation:

From the above graph it is inferred that in 100 respondents 16%

respondents are disagree and 22.7% are agree and the 40% are strongly
agreed.
Table: - 6

The table showing the Awareness about the portfolio:

AWARENESS No. of respondents Percentage (%)

YES 65 86.7

NO 10 13.3

TOTAL 75 100

(Source : Primary Data)

Analysis:

From the above data it is analyzed that the respondent awareness about
the portfolio is 86.7% and 13.3% are unaware about the portfolio
management.
Chart 6:

Awareness about the portfolio

86.7%

13.3%

YES NO

Interpretation:-

From the above chart shows that the awareness about the portfolio is
more and also improve the remaining peoples in the respondents.
Table 7

Investment objectives of investors

Investment objectives Frequency Percentage

(%)
First priority for income and second 29 38.7
priority for growth
Balance preference for income and 36 48
growth
Basically growth oriented but intents to 10 13.3
play somewhat safe
Maximize growth as income is not 0 0
critical
Total 75 100

(Source : Primary Data)

Analysis:

From the above table analyzed that the respondents main investment
objective of the investor‟s growth of balance preference 38.7% and safety of
growth is 13.3%.
Chart 7

Investment objective of investors

48%

50
38.7%
45
40
35
30
25
20
15 13.3%
10
5
0
0%

First priority forBalance preference Basically growth Maximize growth

income and secondfor incomeoriented
and priority
but for growthgrowth
intents as income
to play somewhat safe is not critical

Interpretation:

From the above chart shows that the respondents main investment
objective is the balance preference income and growth is the 1 st priority and
gradually development of income .
Table 8:

Principle source of income

SOURCE OF INCOME Frequency Percentage (%)

Self employed 36 48

Pension 5 6.7

employment 18 24

Other 16 21.3

TOTAL 75 100

(Source : Primary Data)

Analysis:

From the above data it is analyzed that the principle sources of income
of the respondents is self employed is 48%, employment are 24%, others
are21% an pension peoples are 6.7%.
Chart 8:

Principle source of income

60

50

40

30

48
20

24
10 21.3
6.7

0
Self employed Pension employment Other

Interpretation:

Form the above chart analysed it is the inferred that the sources of
income of the respondents is most of self employed peoples. Less respondents
are pension peoples.
Table:9

Investment in your portfolio management

INVESTMENT IN Frequency Percentage (%)

YOUR PORTFOLIO
Shares 33 44

Debenture bonds 12 16

Stock futures and 6 8

option
Mutual funds 24 32

TOTAL 75 100

(Source: Primary Data)

Analysis:

From the above data it is analyzed that the respondents investment in

shares are more that is 44%, investment in mutual funds 32%, debenture
bonds 16% and the stock futures and option are 8% respectively.
Chart:9
Investment in your portfolio management

100%

90%

80%

70%

60%

50%
44 16 8 32
40%

30%

20%

10%

0%

Shares Debenture bondsStock futures and option Mutual funds

Interpretation:

From the above chart shows that the respondent are investment in
shares are more as compared to mutual funds, debenture bonds and stock
futures and options respectively.
Table:10

Investment in any companies by way of investment in shares, bonds

INVESTMENT IN Frequency Percentage

SHARES BONDS (%)
Yes 37 49.3

No 38 50.7

TOTAL 75 100

Analysis:

From the above data it is analyzed that the respondents are investment
in companies by way of shares, bonds are 49.3% are investing and 50% are
not invested.
Chart:10

Investment in any companies by way of investment in shares, bonds

49% Yes
No
51%

Interpretation:

From the above chart shows that the respondents are investment in
company‟s shares and bonds are 1% is less interest as compared to interested
respondents.
Table:11
Source of investment

INVESTMENT OF Frequency Percentage (%)

SOURCE
Own savings 37 49.3

Borrowings 18 24

Both 20 26.7

TOTAL 75 100

(Source: Primary Data)

Analysis:
From the above data it is analyzed that the source of investment are
more respondents are own savings and the less respondents invest money
from borrowings.
Chart:11

Source of investment

50
45
49.3%

40
35
30
25
20

26.7%
24%
15
10
5
0

Own savings
Borrowings
Both

Interpretation:

From the above chart shows that the respondents invest money from their
own savings other than borrowed funds.
Table:12
Experience in the equity market

EXPERIENCE IN Frequency Percentage (%)

THE EQUITY
MARKET
Less than 3years 44 58.7

3-5years 26 34.7

5years &above 5 6.7

TOTAL 75 100

(Source: Primary Data)

Analysis:
From the above data it is analyzed that the respondents have
the experience in the equity market less than the 3 years and
respondents are less experience in the field equity market above 5
years.
Chart:12
Experience in the equity market

58.7%

34.7%

6.7%

Less than 3years 3-5years 5years &above

Interpretation:

From the above graph it is cleared that the respondents have experience
less than 3 years in the equity market.
 Table:13

Knowledge of stock and commodities markets and investment

KNOWLEDGE OF Frequency Percentage (%)

STOCK AND
COMMODITIES
High 21 28
Very high 9 12
Average 40 53.3
Bellow average 5 6.7
TOTAL 75 100

(Source: Primary Data)

Analysis:
From the above data it is analysed that the respondent have the average
knowledge about the equity market stocks and commodities. Only 28%
respondents have the good knowledge about the stocks.
Chart:13

Knowledge of stock and commodities markets and investment

53.3%

28%

12%
6.7%

High Very high Average Bellow average

Interpretation:

From the above chart it is cleared that the respondents have less
knowledge about the stocks and commodities and respondent don‟t have the
more knowledge regarding the equity market.
Table:14
Investment time horizon

INVESTMENT TIME Frequency Percentage (%)

HORIZON

1-3 years 33 44

3-5 years 32 42.7

5-10 years 8 10.7

10-20 years 2 2.7

TOTAL 75 100

(Source: Primary Data)

Analysis
From the above data it is analyzed that the respondents invest the
money in the 3-5 years and less respondents invest the period more than 10
years.
CHART:14
Investment time horizon

44% 42.7% 10.7% 2.7%

1-3 years 3-5 years 5-10 years 10-20 years

Interpretation:
From the above chart it is clear that the respondent not invest
for more periods they invest only less than 1-3 years period.
Table:15
Willingness to take a risk

WILLINGNESS TO Frequency Percentage (%)

TAKE RISK
Willing to take much 25 33.3
risk a possible
Willing to take mode 34 45.3
rate risk
Avoid taking risk 16 21.3
TOTAL 75 100

(Source: Primary Data)

Analysis:
From the above table it is analysed that respondents are
willing to take risk in the equity markets that is 33% respondents
are ready to take risk.
Chart:15
Willingness to take risk

45.3%

33.3%

21.3%

Willing to take much risk a Willing to take mode rate Avoid taking risk
possible risk

Interpretation:

From the above chart it is clear that respondents are willing to take risk
and ready to invest their money in equity markets.
 Table: 16

Returns expect do you require from your investment portfolio

RETURNS EXPECT Frequency Percentage (%)

INVESTMENT
PORTFOLIO
8% 18 24

10% 31 41.3

12% 17 22.7

14% 9 12

TOTAL 75 100

(Source: Primary Data)

Analysis

From the above data it is analyzed that the respondents are expect the
return from the investment is 10% and average 14% respondents wants more
returns on their investment.
 Chart: 16

Return expect do you require from your investment portfolio

100%
90%
80%
70% 24% 41.3% 22.7% 12%
60%
50%
40%
30%
20%
10%
0%
1 2 3 4

RETURNS EXPECT INVESTMENT PORTFOLIO

Interpretation:
From the above chart shows that the respondents expect return
on their investment is 10% and respondents less expects 14%.
 Table: 17

Investment earning to meet their expenses

INVESTMENT EARNINGFOR THE Frequency Percentage

PORTFOLIO NEEDED TO MEET (%)
SOME OR ALL OF EXPENSES
Agree 47 62.7

Strongly agree 22 29.3

Disagree 5 6.7

Strongly disagree 1 1.3

TOTAL 75 100

(Source: Primary Data)

Analysis:

From the above data it is analyzed that the respondents agreed that the
investment returns are helps to fulfil their expenses in the daily life.
Chart:17

Investment earnings to meet their expenses

62.7%
70
60
50
40
30 29.3%
20
10
0
6.7%
1.3%
Agree
Strongly agree
Disagree
Strongly disagree

Interpretation:

From the above chart shows that the respondents are agree that the
return helps in full fill their expenses and respondents agrees to invest more.
Table:18
Option towards investment

OPTION TOWARDS Frequency Percentage (%)

INVESTMENT
Faster growth in interest 26 34.7

Medium growth in interest 47 62.7

Slow growth in interest 2 2.7

TOTAL 75 100

(Source: Primary Data)

Analysis

From the above data it is analyzed that the respondents are invest more
in medium growth investment returns. That is 62% respondents are investing
in medium growth field.
Chart:18
Option towards investment

3%

35%
Faster growth in interest Medium growth in interest Slow growth in interest

62%

Interpretation:

From the above chart it is clear that respondents are interest in invest
medium growth profit.
Table:19
Investment method do you choose

INVESTMENT METHOD DO Frequency Percentage (%)

YOU CHOOSE
Shares 25 33.3

Mutual funds 26 34.7

Fixed deposits 12 16

Gold /silver 7 9.3

Real estate 5 6.7

TOTAL 75 100

(Source: Primary Data)

Analysis

From the table it is analysed that respondents are choose invest money
in mutual funds compare to other investment methods that is 34%.
Chart:19

Investment method does you choose

34.7%
33.3%

16%

9.3%
6.7%

Shares Mutual funds Fixed deposits Gold /silver Real estate

Interpretation:

Form the above chart it is clear that the respondents prefers mutual
funds for their investment.
Table:20
Factor do you consider before investing

FACTOR CONSIDER Frequency Percentage (%)

BEFORE INVESTING

Safety of principles 36 48

Low risk 22 29.3

High risk 12 16

Maturity period 5 6.7

TOTAL 75 100

(Source: Primary Data)

Analysis
Form the above data it is analysed that the respondents considered
safety of principle of their amount while investing the money than other
factors.
Chart: 20

Factor do you consider before investing

7%

16%

Safety of principles

48% Low risk

High risk Maturity period

29%

Interpretation:
From the above chart it is cleared that the respondents choose
safety of their principles other than the profits.
 Table: 21
Investor seeking to maximize safety some time earns less than
inflation rate

INVESTORS EARN LESS THAN Frequency Percentage

INFULATION RATE (%)
It is most important that the value of my 31 41.3
investment keep pace with inflation

It is important that my investment grow 32 42.7

faster than inflation
Over a long period of time my assets 12 16
should grow at a rate much faster than
inflation
TOTAL 75 100

(Source: Primary Data)

Analysis
From the above data it is analysed that the respondent are
willing to invest their money in the fluctuation period and inflation
will help to raise their money that is 42%.
 Chart: 21

Investor seeking to maximize safety some time earns less than inflation
rate

45

40

35

30

25

20
42.7
41.3 15

10

16 5

rtant that myOver a long period of time my value of my investment keepinvestment grow faster thanassets should grow at a rate
er than inflation

Interpretation:

From the above chart it is clear that the respondents give the more
important on investment growth in faster than inflation rates.
Table:22

Attitude towards the investor’s portfolio

ATTITUDE TOWARDS THE Frequency Percentage

INVESTORS PORTFOLIO (%)
Accept lower long run returns with 21 28
maximum stability
Accept little volatility for higher returns 28 37.3

Accept higher volatility growth is the 21 28

goal
Accept substantial volatility as 5 6.7
maximum appreciation in the goal
TOTAL 75 100

(Source: Primary Data)

Analysis:
From the above data it is analyzed that the respondents are interested
more returns than the stability of the shares that is 37%.
Chart:22
Attitude towards the investor portfolio

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Accept lower longAccept littleAccept higherAccept substantial

run returns withvolatility for highervolatility growth isvolatility as maximum stabilityreturnsthe goalmaximum
appreciation in the goal

Interpretation:

From the above chart it is cleared that the respondents prefer higher
return than the safety of their principles.
Table:23
Part of the organization is the main portfolio management
function

Part of the Frequency Percentage (%)

organization portfolio
management
Strategy 18 24
Planning 39 52
Change 9 12
Finance 9 12
TOTAL 75 100

(Source: Primary Data)

Analysis:
From the above data it is analyzed that the respondents are invest in a
organisation by their planning than their financial worth.
Chart: 23

Part of the organization is the main portfolio management function

12%
24%
12%

Strategy Planning Change Finance

52%

Interpretation:

Form the above chart it is clear that the respondents are look after
organisation plans and performances in the present market.
Table: 24
Units structure of portfolio investment initiatives

PORTFOLIO INVESTMENT Frequency Percentage (%)

INTIATIVES
Project 30 40

Programs 30 40

Others 15 20

TOTAL 75 100

(Source: Primary Data)

Analysis:
Form the above data it is analyzed that the respondent prefers
investment by this projects and programs of the company.
Chart:24
Units structure of portfolio investment initiatives

40% 40%

40

35

30
20%
25

20

15

10

0
Project Programs Others

Interpretation:
Form the above chart it is clear that the respondent are prefer
projects and programs of the company before investing.
Table:25
Many profit comprise you change/ investment portfolio

Profit comprise Frequency Percentage (%)

investment portfolio
Not applicable 19 25.3
Less than 10 39 52
11-50 14 18.7
50-100 3 4
TOTAL 75 100

(Source: Primary Data)

Analysis:
From the above data it is analysed that the respondent view of
changing their investment is less than 10 years period and investors
wants high returns for their investment.
Chart: 25

Many profits comprise you change/ investment portfolio

52%

25.3%

18.7%

4%

Not applicable Less than 10 Nov-50 50-100

Interpretation:
From the above chart it is that the respondents are try to
change their investment policy less than the 10 years period.
 CHAPTER 5

SUMMARY OF FINDINGS, SUGGESTIONS AND

CONCLUSION

FINDINGS

 The respondents have the awareness about the portfolio.

 The investor main objective is balance preference for income and growth will
invest.
 The self employment people invest more compare to salaried peoples.
 The respondents want to invest more on mutual funds.
 The respondents do not invest more on shares in company .
 The investors invest more by their own savings rather than borrowings funds.
 The respondents have the expenses in the equity markets less than 3years.
 The respondents have the average knowledge about the stocks and commodities.
 The investors not willing to take more risk in their investment.
 The investor except the returns from their investment is 10%.

SUGGESTIONS

 The respondents do not have the complete knowledge regarding portfolio.

 The investors should have the complete knowledge before investing.
 The self employed people have good knowledge in shares and wants to incase their
profits by portfolio management.
 The companies give more advertisement regarding their stock level.
 The companies should create the Trent in the customer mind regarding their
growth.
 The investors should utilize all sources of funds while investing.
  The respondents are investing more on mutual funds than the shares.
 The respondents and investors should have the knowledge about the stock and
commodities before making investment.
 The investors should reading to take risk before investing.
 The investors are expecting more returns on their investment.

CONCLUSION

Investment is the employment of funds on asset aim of earning income or capital

appropriation investment to attributes namely time and risk present consumption is sacrifice
to get a return in the future. Sacrifice that as to be borne is certain but the return in the future
may be uncertain this attribute of investment indicates the risk factors. The risk is
undertaken view to rape some returns from the investment layman investment means some
monitory commitment. A person commitment to buy a flat or a house for is personal use
may be an investment from is point of view. This can‟t be considering as an actual
investment is it involves sacrifice but does not yield any financial returns.

Investment analysis and portfolio is challenging for the two main reasons, firstly,
the subject embraces diversified fields including managerial finance, accounting,
economics, statistics and mathematics; seconds it provides operate unit to apply investment
theories and concept to find solution to real world investment problems.

Those invest may be depended as “a commitment of funds made in the expectation

of some positive rate of returns”. Expectation of return is an essential element of investment.
 BIBLOGRAPHY

REFERENCE BOOKS

SL.NO AUTHOR TITLE OF THE BOOK PUBLISHER EDITION

1 Preeti Singh Investment Management Himalaya 9th Edition

Publication

2 Donald E. Ficher Securities analysis and 9th Edition

Ronald J. Jordan portfolio management
Dorling kindesley
pvt ltd

3 V.A.Avadhani Securities analysis and Himalaya 12th Edition

portfolio management Publication

4 Punithvathy Securities analysis and Vikas publishing 12th Edition

Pandian portfolio management house pvt ltd

JOURNAL/MAGAZINES:-

1. “Realization utility”, Journals of financial economics ,forthcoming

2. “Speculating Against an Overconfident market”, Journals of Financial
market 6:199-225.

WEBSITE

 www.investopedia.com
 www.portfoliomanagement.com
 ANNEXURE

“A Study on investment analysis and portfolio management with

reference to equity market at Bangalore city”

PERSONAL DETAILS

NAME

Age:-
a) 15-20b) 20-30c) 30-40d) 40& above Gender:

a) Male b) Female

Occupation:

a) Business b) Salaried personc) Profession Income

a) 15,000-20000b) 20,000-25,000c) 25,000-30,000d) 30,000& above

1. Are you aware about the portfolio?

a) Yes b) N0
2. What is your investment objective?
a) First priority for income and second priority for growth
b) Balance preference for income and growth
c) Basically growth oriented but intends to play it somewhat safe
d) Maximize growth as income is not critical

3. What is your principle source of income?

a) Self employed b) Pension or other c) Employment

4. State the various investments in your portfolio management?

a) Shares b) Debenture bonds c) Stock futures and options d) Mutual
e) Insurance polices
5. Have you made any investment in any companies by way of investment in
Shares, Bonds etc.?
a) Yes b) No

6. State the source of investment?

a) Own savings b) Borrowings c) Both

7. What is your experience in the equity market?

a) Less than 3years b) 3-5years c) 5years and above

8. How would you describe your knowledge of stock and commodities markets
and investment?
a) High b) Very high c) Average d) Bellow average

9. What is your investment time horizon when do you think you will need or what to
tab into your portfolio?
a) 1-3years b) 3-5years c) 5-10years d) 10-20years

10. Give your willingness to take risk?

a) Willing to take much risk as possible
b) Willing to take mode rate risk
c) Avoid taking risk

11. How much returns expect do you require from your investment portfolio?
a) 8% b) 10% c) 12% d) 14%

12. Will the investment earnings for the portfolio be needed to meet some or all of
your expenses?
a) Agree b) Strongly agree c) Disagree d) Strongly disagree

13. What is your option towards investment?

a) Faster growth in interest b) Medium growth in interest c) Slow growth in
interest
14. Which investment method do you choose?
a) Shares
b) Mutual funds
c) Fixed deposits
d) Gold/Silver
e) Real Estate

15. Which factor do you consider before investing?

a) Safety of principal
b) Low risk
c) High return
d) Maturity period

16. Investors seeking to maximize safety sometime earn less than the inflation
rate with respect to
Your goals, which of the following most true?
a) It is most important that the value of my investment keep pace with inflation
b) It is important that my investment grow faster than inflation
c) Over a long period of time my assets should grow at a rate much faster than
inflation

17. What is your attitude towards fluctuation in the value of your portfolio?
a) Accept lower long run returns with maximum stability
b) Accept little volatility for higher returns
c) Accept higher volatility as growth is the goal
d) Accept substantial volatility as maximum appreciation in the goal

18. In which part of the organization is the main portfolio management (PFM)
functions domiciled?
a) Strategy b) Planning c) Change d) finance

19. In what units do you structure you are portfolio of change \investment initiatives?
a) Project b) Programs c) others
20. How many profit comprise you change/ investment portfolio?
a) Not applicable b) less than 10 c) 11-50 d) 50-100 e) More than 100

21. Do you also include services / BAU within your change /investment portfolio?
a) YES b) NO

22. How would you describe the approach to portfolio management in your organization?
a) Formally managed at the organization level all change initiatives
b) Formally managed at the organization level
c) Formally developed to sub-organizational level all change initiatives.
MADHU_KN_1NH19MBA73_InternshipReport.pdf
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