study on changing scenario of investment in financial market

8/6/2019 Study On Changing Scenario of Investment In Financial Market

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PROJECT REPORT

ON

Study On Changing Scenario of InvestmentIn Financial Market

AT

PRUDENTIAL ICICI AMC LTD.

PROJECT REPORT SUBMITTED IN PARTIAL FULFILLMENT OF

POST GRADUATE DIPLOMA IN MANAGEMENT

2009-2011

I-BUSINESS INSTITUTE,GREATER NOIDA

SUBMITTED BY

NITIN GARG

PGDM:09033


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ACKNOWLEDGEMENT


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ACKNOWLEDGEMENT

I take this opportunity to express my deep sense of gratitude towards all those who

have been directly or indirectly helped me in the successful completion of the

project.

Finally I would like to thank all who helped me to complete this project.


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EXECUTIVE

SUMMARY


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EXECUTIVE SUMMARY

Title : RESEARCH ON CHANGING SCENARIO OFINVESTMENT IN FINANCIAL MARKET

COMPANY : prudential ICICI AMC Ltd.

This is a project about trends of Investment which is modernizing or

modifying day by day in financial market. It was because of changing the

perception of people for investing their money in Investment Plans.

OBJECTIVE

The main objective behind the market research is analysis the

market and find out suspects then convert into prospects and motivate or

promote them to invest their money in modern investment plans instead of

traditional plans.

RESEARCH METHODOLOGY

Research methodology which was use in market research qualitative

and quantitative techniques. The primary data was collected by personal

Interviews with the help of structured questionnaire and Secondary data was

collected by Internet, Journals, Magazines etc.


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FINDINGS

Maximum people were not ready to investment because they already

invested their money in march due to tax benefit.

The second reason was due to political uncertainty stock market is

highly volatile hence people were very scared for investment

Maximum people were interested in private sector for invest their

money.

LIMITATION

The unwillingness of the respondents to answer..

Due to declined stage people were not interested to do investment.

Time Constraint.

RECOMMENDATION

The creation of awareness about the need and importance of modern

Investments is vital.

New product innovation, low money investment plans and better

service is crucial for the company to increase its market share.


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CONCLUSION

Change is very important and one whose goes which the changing

environment always succeeds, that is what I have learnt from the study. The

competition has grown too much in the Investment Sector with the opening

of the sector. In this competition those who will survive who will take actions

quickly and smartly.

After Globalization plenty of Insurance & Investment related MNCs

came in India and developed their business. Due to globalization

Competition increases day to day and every rival exploring new innovative

ideas in investment plans for sustaining in Indian market. Today, Mutual

Fund, Unit Linked Insurance Plan (ULIP) and Systematic Investment Plan

(SIP) is most popular for Investment because they are fulfilling investors

requirements as ULIP is a combination of Modern + Traditional Insurance

Plans and which provides Tax benefit, Risk Cover and better growth to the

people whereas traditional Insurance plans are not consider as better growth

Plans.Therefore, We can realize that Investment scenario in

market is totally change and every people want to invest their money in

modern Investment plans those are more attractive and more flexible.


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INTRODUCTION


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INTRODUCTION

INVESTMENTS

What is Investment.??

The money you earn is partly spent and the rest saved for meeting

future expenses. Instead of keeping the savings idle you may like to use

savings in order to get return on it in the future which helps to your

unplanned expenses.

What is the need of INVESTMENTS..??

We need to invest to generate a specified sum of money for a specific

goal in life and its make a provision for an uncertain future.

One of the important reasons why we need to invest wisely is to meet

the cost of Inflation. Inflation is the rate by which the cost of living

increases. The cost of living is simply what it costs to buy the goods and

services you need to live. Inflation causes money to lose value because it

will not buy the same amount of a good or a service in the future as it does

now or did in the past.

For example, if there was a 6% inflation rate for the next 20 years, a Rs.

100 purchase today would cost Rs. 321 in 20 years. This is why it is

important to consider inflation as a factor in any long-term investment

strategy. Remember to look at an investment's 'real' rate of return, which is

the return after inflation. The aim of investments should be to provide a

return above the inflation rate to ensure that the investment does not

decrease in value.


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When to start Investing?

The sooner one starts investing the better. By investing early you allow your

investments more time to grow, whereby the concept of compounding (as

we shall see later) increases your income, by accumulating the principal and

7 the interest or dividend earned on it, year after year. The three golden

rules for all investors are:

y Invest early

y Invest regularly

y Invest for long term and not short term

What care should one take while investing?

Before making any investment, one must ensure to:

y obtain written documents explaining the investment

y read and understand such documents

y verify the legitimacy of the investment

y find out the costs and benefits associated with the investment

y assess the risk-return profile of the investment

y know the liquidity and safety aspects of the investment

y ascertain if it is appropriate for your specific goals

y compare these details with other investment opportunities available

y examine if it fits in with other investments you are considering

y deal only through an authorized intermediary

y see all clarifications about the intermediary and the investment

y explore the options available to you if something were to go.

y and then, if satisfied, make the investment.

(These are called the Twelve Important Steps to Investing)


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What is meant by Interest?

When we borrow money, we are expected to pay for using it this is known

as Interest. Interest is an amount charged to the borrower for the privilege

of using the lenders money. Interest is usually calculated as a percentage of

the principal balance (the amount of money borrowed). The percentage rate

may be fixed for the life of the loan, or it may be variable, depending on the

terms of the loan.

What factors determine interestrates?

When we talk of interest rates, there are different types of interest rates -

rates that banks offer to their depositors, rates that they lend to their

borrowers, the rate at which the Government borrows in the 8

Bond/Government Securities market, rates offered to investors in small

savings schemes like NSC, PPF, rates at which companies issue fixed

deposits etc.

The factors which govern these interest rates are mostly economyrelated and are commonly referred to as macroeconomic factors. Some of

these factors are:

y Demand for money

y Level of Government borrowings

y Supply of money

y Inflation rate

The Reserve Bank of India and the Government policies which determinesome of the variables mentioned above


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Whatare various options available for investment?

One may invest in:

y Physical assets like real estate, gold/jewellery, commodities etc.

and/or

y Financial assets such as fixed deposits with banks, small saving

instruments with post offices, insurance/provident/pension fund etc.

or securities market related instruments like shares, bonds,

debentures etc.

Investment plan in the past scenario:

Bank Fixed Deposits

Saving account

Post office NSC

Kisan vikas patra

BankFixed Deposits:

Bank Fixed Deposits are also known as Term Deposits. In a Fixed

Deposit Account, a certain sum of money is deposited in the bank for a

specified time period with a fixed rate of interest.

The rate of interest for Bank Fixed Deposits depends on the maturity period.

It is higher in case of longer maturity period. There is great flexibility in

maturity period and it ranges from 7days to 10 years. The interest is

compounded annually and is added to the principal amount.


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Savings Bank Account:

Savings Bank Account is often the first banking product people use,

which offers low interest (4%-5% p.a.), making them only marginally better

than fixed deposits.

Post Office Savings:

Post Office Monthly Income Scheme is a low risk saving instrument,

which can be availed through any post office. It provides an interest rate of

8% per annum, which is paid monthly. Minimum amount, which can be

invested, is Rs. 1,000/- and additional investment in multiples of 1,000/-.

Maximum amount is Rs. 3,00,000/- (if Single) or Rs. 6,00,000/- (if held

Jointly) during a year. It has a maturity period of 6 years. A bonus of 10% is

paid at the time of maturity. Premature withdrawal is permitted if deposit is

more than one year old. A deduction of 5% is levied from the principal

amount if withdrawn prematurely; the 10% bonus is also denied.

National Savings Certificates:

National Savings Certificates (NSC) are certificates issued by

Department of post, Government of India and are available at all post office

counters in the country. It is a long term safe savings option for the

investor. The scheme combines growth in money with reductions in tax

liability as per the provisions of the Income Tax Act, 1961. The duration of a

NSC scheme is 6 years.


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Kisan Vikas Patra:

Kisan Vikas Patra (KVP) is a saving instrument that provides interest

income similar to bonds. Amount invested in Kisan Vikas Patra doubles on

maturity after 8 years & 7 months.

Kisan Vikas Patra can be purchased by the following:

y An adult in his own name, or on behalf of a minor,

y A minor,

y A Trust,

y Two adults jointly.

Kisan Vikas Patra are available in the denominations of Rs 100, Rs 500, Rs

1000, Rs 5000, Rs. 10,000 & Rs. 50,000. There is no maximum limit on

purchase ofKVPs. Premature encashment of the certificate is not permissible

except at a discount in the case of death of the holder(s), forfeiture by a

pledgee and when ordered by a court of law.

Investment plan in the present scenario:

y Shares (NSE & BSE)y Mutual Funds

y Insurance

y ULIP

National Stock Exchange (NSE):

The National Stock Exchange of India Limited was created on the basis

of the report of the High Powered Study Group on Establishment of New


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Stock Exchanges, which recommended promotion of a National Stock

Exchange by financial institutions to provide access to investors from all

across the country on an equal footing. In 1992, NSE was incorporated as a

tax-paying company unlike other stock exchanges in the country. In April

1993, NSE was recognized as a stock exchange under the Securities

Contracts (Regulation) Act, 1956 and it commenced operations in the

Wholesale Debt Market (WDM) segment in June 1994. The Capital Market

(Equities) segment commenced operations in November 1994 and

operations in Derivatives segment were started in June 2000.

In October 1995, National Stock Exchange became the largest stock

exchange in the country. NSE launched S&P CNXNifty in April 1996. NSE is

one of the largest interactive VSAT based stock exchanges in the world.

Presently, it supports more than 3000 VSATs. The NSE- network is the

largest private wide area network in India and the first extended C- Band

VSAT network in the world.

Bombay Stock Exchange (BSE):

Bombay Stock Exchange Limited is the oldest stock exchange in Asia.

Popularly known as BSE it was established as "The Native Share & Stock

Brokers Association" in 1875.

It is the first stock exchange in India to obtain permanent recognition in

1956 from the Government of India under the Securities Contracts

(Regulation)Act,1956.


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Bombay Stock Exchange played a pivotal role in the development of the

Indian capital market and its index, SENSEX, is tracked worldwide. The

Exchange has a nation-wide reach with a presence in 417 cities and towns of

India. BSE provides an efficient and transparent market for trading in equity,

debt instruments and derivatives.

Mutual Funds in India:

Mutual Fund is an instrument of investing money. Nowadays, bank

rates have fallen down and are generally below the inflation rate. Therefore,

keeping large amounts of money in bank is not a wise option, as in real

terms the value of money decreases over a period of time.

One of the options is to invest the money in stock market. But a common

investor is not informed and competent enough to understand the intricacies

of stock market. This is where mutual funds come to the rescue.

A mutual fund is a group of investors operating through a fund manager to

purchase a diverse portfolio of stocks or bonds. Mutual funds are highly cost

efficient and very easy to invest in. By pooling money together in a mutual

fund, investors can purchase stocks or bonds with much lower trading costs

than if they tried to do it on their own. Also, one doesn't have to figure out

which stocks or bonds to buy. But the biggest advantage of mutual funds is

diversification.

y Diversification means spreading out money across many different types of

investments. When one investment is down another might be up. Diversification of

investment holdings reduces the risk tremendously.

y


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Insurance:

Life is a roller coaster ride and is full of twists and turns. You cannot

take anything for granted in life. Insurance policies are a safeguard against

the uncertainties of life.

Insurance is system by which the losses suffered by a few are spread over

many, exposed to similar risks. Insurance is a protection against financial

loss arising on the happening of an unexpected event. Insurance policy helps

in not only mitigating risks but also provides a financial cushion against

adverse financial burdens suffered.

Insurance policies cover the risk of life as well as other assets and

valuables such as home, automobiles, jewelry et al. On the basis of the risk

they cover, insurance policies can be classified into two categories.

Unit Linked Insurance Plans (ULIP):

Unit linked insurance plan (ULIP) is life insurance solution that

provides for the benefits of protection and flexibility in investment. The

investment is denoted as units and is represented by the value that it has

attained called as Net Asset Value (NAV). The policy value at any time varies

according to the value of the underlying assets at the time.

ULIP provides multiple benefits to the consumer. The benefits include:

y Life protection

y Investment and Savings

y Flexibility

y Adjustable Life Cover

y Investment Options

y Transparency


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y Options to take additional cover against

y Death due to accident

y Disability

y Critical Illness

y Surgeries

y Liquidity

y Tax planning


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OBJECTIVE &

SCOPE


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OBJECTIVE & SCOPEObjective:

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 do the comparative analysis of the two options and to bring forth,

thus to the potential customer.

To create awareness among the customer

To create marketing awareness of the Investment product and also

identify the potential for this product.

To analyze the marketing strategy of the competitors

To analyze Investment pattern.

Search Method:

The method used for research was descriptive method. It involved

collection of primary data and Secondary data. As far as project was

concerned primary data was obtained by market analysis through field.

Contact Method:

Telephone Interview

Personal Interview


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INDUSTRY

PROFILE


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INDUSTRY PROFILEOVERVIEW OF INVESTMENT:

Institutional investment

The rapid growth of stock markets in the world, to a significant extent could

be explained by the surge in the institutional investors consisting of pension

funds, insurance companies and mutual funds. During the period 1995 and

2005, the assets under management of the institutional investors doubled

from US$21 trillion to US$53 trillion. A large number of institutional

investors are moving away from the home bias investing in outside world.

Emerging markets with higher economic growth and rapidly growing

financial markets became major centers of destination for the investments of

institutional investors. For instance in the US, in 1994, pension funds

invested 41% of their portfolio in domestic equity and 7% in international

equities, where as by 2005 that share rose to 48% in domestic equities and

15% in international equities. The portfolio allocation to bond markets during

the same period reduced from 42% to 32%. Emerging markets received

sizeable portion of the investments. In the US, the dedicated emerging

markets mutual funds rose from about US$27 bn in 2000 to US$ 230 bn in

2006.

International listings

On the back of the liberalization of cross border financial flows, companies in

several countries are seeking listing in international exchanges to garner

benefits from international investors as also widen their investor base. The


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number of foreign companies listed in the London Stock Exchange rose from

387 in 1970 to 553 in 1990 to 636 in 2006. The number of foreign

companies listed on the NYSE has also risen rapidly in the 1990s. There is a

keen competition across the worlds leading stock exchanges to promote

international listing and gain greater influence. In the recent period, the US

experienced a slowdown in the listing of foreign companies. The decline is

attributed to stringent corporate governance norms that were applied

following the corporate abuses found in the beginning of the decade. The US

is now examining in greater detail measures to gain the prominence once it

enjoyed in the international listings. The Alternative Investment Market of

London Stock Exchange attracted huge interest from SMEs from a large

number of countries.

Emerging markets as an investment destination

Liberalization of capital flows led to surge in international investment into

emerging economies finding value on the back of huge prospects for growth.

The flow of net Foreign Direct Investment (FDI) into developing countries

increased from US$ 170 bn in 1998 to US$ 325 bn in 2006 and net portfolio

equity flows increased from US$6 bn to US$94 bn during the same period.

Net debt flows during this period are rather subdued with net debt flows

from official creditors turning negative. Net portfolio equity flows to China

between the year 2000 and 2006 rose from US$6.9 bn to US$32 bn and in

India from US$2.3 bn to US$8.7 bn. Other emerging markets such as Brazil,

Mexico, South Africa, Thailand and Russia too, showed surge in the net

portfolio equity flows. Emerging markets showed significant growth in stock

prices making them attractive investment destinations though issues of

valuations are beginning to become a concern now.


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Currently, looking at the five most important asset classes - real

estate, equities, bonds, commodities, and art (including collectibles)

Admittedly, some assets have performed better than others, but in general

every sort of asset has risen in price, and this is true everywhere in the

world.

In the early phases of all previous investment booms, investors failed

to recognize that the "rules of the game" had changed and continued to play

the asset class that had been the leader in the previous investment mania.

In the 1980s, every increase in gold and silver prices was perceived to be

the beginning of a new bull market in precious metals (after silver prices

collapsed in January 1980, prices doubled three times between 1980 and

1990 - all within a downtrend), while investors maintained a very skeptical

view of bonds. In the early 1990s, investors failed to recognize the

emergence of a high-tech sector uptrend, although, as explained above,

high-tech stocks were already performing extremely well between 1990 and

1995. Global investors continued to believe in the merits of Asian stocks

right to the end and actually stepped up their buying in early 1997!

Similarly, in the current asset inflation, investors have continued to focus on

the high-tech bull market and have largely missed out on the huge increase

in price of commodities, and of Indian, Latin American, and Russian equities.

At the end of each investment mania, investors believed in some sort of

"excess liquidity" that would drive the object of the speculation forever

higher.

After globalization many of MNCs came here and set up their business

in India. Therefore, The competition would also increase and every

investment company provides better or adorable plans to the potential

customer and they also retain their existing customer through providing

better services.


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ROLE OF INVESTMENT IN OUR LIFE:

Riskand uncertainties are part of lifes and they will never stop

like accident, illness,theftand other uncertainties they will happen

in life suddenly and we can notmanage our expenses according to

them.We will invest ourmoney formake a solution of big future

expenses that can we never change like higher education,marriage

of our children and we can also make easy of our future by taking

pension plans.

INVESTMENT AS INSURANCE:

Investment assures your uncertain future and provides you secure life.

Insurance is an attractive option for investment. While most people

recognize the risk hedging and tax saving potential of insurance, many are

not aware of its advantages as an investment option as well.

Today, Insurance Company promotes ULIP as investment product

which provides you good growth, tax benefit, risk cover and short term

plans. In fact, the premium you pay for an insurance policy is an investment

against risk. Thus, before comparing with other schemes, you must accept

that a part of the total amount invested in ULIP goes towards providing for

the risk cover, while the rest is used for saving

ULIP is a unique investment avenue that delivers sound returns

in addition to protection.


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Investmentas Tax Planning:

Long term Investment serves as an excellent tax saving mechanism

too. The Government of India has offered tax incentives to long term

investment products in order to facilitate the flow of funds into productive

assets. Under Section 88C and section 10(10D) of Income Tax Act 1961,

an individual is entitled to a rebate of 20 per cent on the annual premium

payable on his/her life of his/her children or adult children. The rebate is

deductible from tax payable by the individual or a Hindu Undivided Family.

This rebate is can be availed up to a maximum of Rs. 48000.

INVESTMENT AS FUTURE SOLUTION:

Investment work as solution of your uncertain future. Its also helps to

fulfill your future needs and demands. One of the important reasons why

one needs to invest wisely is to meet the cost of Inflation.Inflation causes

money to lose value because it will not buy the same amount of a good or a

service in the future as it does now or did in the past Investment. Therefore,

we can say that Investment

Of our money helps in future expenses.


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TYPES OF INVESTMENT PLANS:

There are two types of Investment plans are exist. Most of the

products offered by Investment companies are developed and structuredaround these basic plans and are usually an extension or a combination of

these plans. So, what are these plans and how do they differ from each

other?

Short Term InvestmentPlan:

Broadly speaking, savings bank account, money market/liquid funds

and fixed deposits with banks may be considered as short-term financial

investment options:

Savings Bank Account:

Saving Bank Account is often the first banking product people use,

which offers low interest (4%-5% p.a.), making them only marginally better

than fixed deposits.

Money Market or Liquid Funds:

Money Market or Liquid Fundsare a specialized form of mutual funds

that invest in extremely short-term fixed income instruments and thereby

provide easy liquidity. Unlike most mutual funds, money market funds are

primarily oriented towards protecting your capital and then, aim to maximize

returns. Money market funds usually yield better returns than savings

accounts, but lower than bank fixed deposits.

Long Term InvestmentPlans:


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Public ProvidentFund:

A long term savings instrument with a maturity of 15 years and

interest payable at 8% per annum compounded annually. A PPF account can

be opened through a nationalized bank at anytime during the year and is

open all through the year for depositing money. Tax benefits can be availed

for the amount invested and interest accrued is tax-free. A withdrawal is

permissible every year from the seventh financial year of the date of

opening of the account and the amount of withdrawal will be limited to 50%

of the balance at credit at the end of the 4th year immediately preceding the

year in which the amount is withdrawn or at the end of the preceding year

whichever is lower the amount of loan if any.

Company Fixed Deposits:

These are short-term (six months) to medium-term (three to five

years) borrowings by companies at a fixed rate of interest which is payable

monthly, quarterly, semi10 annually or annually. They can also be

cumulative fixed deposits where the entire principal along with the interest is

paid at the end of the loan period. The rate of interest varies between 6-9%

per annum for company FDs. The interest received is after deduction of

taxes.

Bonds:

It is a fixed income (debt) instrument issued for a period of more than

one year with the purpose of raising capital. The central or state

government, corporations and similar institutions sell bonds. A bond is

generally a promise to repay the principal along with a fixed rate of interest

on a specified date, called the Maturity Date.


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COMPANY

PROFILE


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ORGNISATIONAL PROFILE

Aboutthe organization:

ICICI Bank is India's second-largest bank with total assets of Rs.

3,997.95 billion (US$ 100 billion) at March 31, 2008 and profit after tax of

Rs. 41.58 billion for the year ended March 31, 2008. ICICI Bank is second

amongst all the companies listed on the Indian stock exchanges in terms of

free float market capitalization. The Bank has a network of about 1,308

branches and 3,950 ATMs in India and presence in 18 countries. ICICI Bank

offers a wide range of banking products and financial services to corporate

and retail customers through a variety of delivery channels and through its

specialized subsidiaries and affiliates in the areas of investment banking, life

and non-life insurance, venture capital and asset management. The Bank

currently has subsidiaries in the United Kingdom, Russia and Canada,

branches in Unites States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar

and Dubai International Finance Centre and representative offices in United

Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and

Indonesia. Our UK subsidiary has established branches in Belgium and

Germany.

ICICI Bank's equity shares are listed in India on Bombay Stock Exchange

and the National Stock Exchange of India Limited and its American

Depositary Receipts (ADRs) are listed on the New York Stock Exchange

(NYSE).


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VISION:

To make ICICI Bank dominant life and built on trust by world-class

people and service

This we hope to achieve by :

Understanding the needs of customers and offering them superior

products and service.

Leveraging technology to service customers quickly, efficiently and

conveniently.

Developing and implementing superior risk management and

investment strategies to offer sustainable and stable returns to our

policy holders.

Providing an enabling environment to faster growth and learning forour employees.

And above all building transparency in all our dealing

The success of the company will be founded in its unflinching to 5 cores

values-integrity, customer first boundary less, ownership and passion. Each

of the values describes what the company stands for, the qualities of our

people and the way we work. We do believe that we are on the threshold of

an exciting new opportunity, were we can play significant role in redefine

and reshaping the sector. Given the quality of our percentage and the

commitment of our team, there is no limit to our growth.


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Promoters:

ICICI Bank is a professionally managed entity that was created post

the merger of the erstwhile ICICI Limited with its subsidiary ICICI Bank. Due

to the merger with its parent, the shareholding of ICICI Bank has changed

significantly and foreign investors now have over 73% stake in the bank.

Government controlled entities own over 15% stake in ICICI Bank, while

other Indian entities hold the rest of the stake. This means that there is no

defined promoters entity for ICICI Bank and the functioning of the bank is in

the hands of a professional team of managers.

Objects ofthe issue:

The objects of the issue are to provide capital for

Executing the banks business strategy, including growth in its retail

portfolio. International Expansion,

Investment in its insurance subsidiaries, and

Other general corporate purposes.


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Introduction of ICICI Bank

ICICI Group


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Overview :-

ICICI Bank was originally promoted in 1994 by ICICI Limited, an

Indian financial institution, and was its wholly-owned subsidiary. ICICI's

shareholding in ICICI Bank was reduced to 46% through a public offering of

shares in India in fiscal 1998, an equity offering in the form of ADRs listed

on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura

Limited in an all-stock amalgamation in fiscal 2001, and secondary market

sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI

was formed in 1955 at the initiative of the World Bank, the Government of

India and representatives of Indian industry. The principal objective was to

create a development financial institution for providing medium-term and

long-term project financing to Indian businesses. In the 1990s, ICICI

transformed its business from a development financial institution offering

only project finance to a diversified financial services group offering a wide

variety of products and services, both directly and through a number of

subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first

Indian company and the first bank or financial institution from non-Japan

Asia to be listed on the NYSE.

After consideration of various corporate structuring alternatives in the

context of the emerging competitive scenario in the Indian banking industry,

and the move towards universal banking, the managements of ICICI and

ICICI Bank formed the view that the merger of ICICI with ICICI Bank would

be the optimal strategic alternative for both entities, and would create the

optimal legal structure for the ICICI group's universal banking strategy. The

merger would enhance value for ICICI shareholders through the merged

entity's access to low-cost deposits, greater opportunities for earning fee-

based income and the ability to participate in the payments system and

provide transaction-banking services. The merger would enhance value for


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ICICI Bank shareholders through a large capital base and scale of

operations, seamless access to ICICI's strong corporate relationships built up

over five decades, entry into new business segments, higher market share in

various business segments, particularly fee-based services, and access to

the vast talent pool of ICICI and its subsidiaries. In October 2001, the

Boards ofDirectors of ICICI and ICICI Bank approved the merger of ICICI

and two of its wholly-owned retail finance subsidiaries, ICICI Personal

Financial Services Limited and ICICI Capital Services Limited, with ICICI

Bank. The merger was approved by shareholders of ICICI and ICICI Bank in

January 2002, by the High Court of Gujarat at Ahmedabad in March 2002,

and by the High Court of Judicature at Mumbai and the Reserve Bank of

India in April 2002. Consequent to the merger, the ICICI group's financing

and banking operations, both wholesale and retail, have been integrated in a

single entity.

ICICI Bank has formulated a Code of Business Conduct and Ethics for

its directors and employees.


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PRODUCT

PROFILE


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PRODUCT PROFILE

The ICICI Bankadvantages:

The salient points that you make like to keep in mind before choosing

on your strategic partnership.

Strong retail focus:

After the merger with parent ICICI, ICICI Bank is focusing strongly onthe retail segment in order to fuel its growth for the future. The bank has

been very aggressive in this segment, so much so that retail assets now

make up nearly 48% of total advances of the bank. ICICI Bank's market

share in incremental retail loans disbursed is close to 30%. This indicates the

focus the bank has evinced in the retail segment. ICICI Bank has also

significantly pared its exposure to the corporate segment in order to

increase its presence in the retail segment.

Wide reach:

ICICI Bank has been on an expansion spree in the last year and in this

period it has seen its branch size increase to around 540 branches. The bank

is also leveraging on a large ATM network in order to augment its reach

further. At the end of FY03, the bank had an ATM network of over 1,500

ATMs spread across the country. Due to the aggressive branch and ATM

network expansion, the bank has been able to grow its retail assets

significantly. Going forward, the bank is in a good position to tap the retail

market due to its extended reach.


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Benefits fromthe Securitization Act:

The erstwhile ICICI Limited had a significant amount of NPAs in its

books. The passing of the Securitization Act is likely to go a long way in

helping ICICI Bank recovering dues from defaulters. The bank has already

formed an Asset Recovery Company (ARC), in partnership with entities like

SBI and IDBI in order to take advantage of the provisions of the act.

Restructuring operations:

In an effort to reduce its interest costs ICICI Bank undertook an

exercise to reduce its parent ICICI's high cost liabilities. In this effort, the

bank has met with significant success. ICICI Bank has paid back a large part

of ICICI's long-term high cost borrowings and in its place replace it with low

cost deposits. This has helped the bank to improve its interest spread to

1.5% (FY03) from 1.2% in FY02. Going forward with further restructuring of

borrowings and increased contribution from retail deposits, ICICI Bank is

likely to witness further improvement in its spreads.

Today, if you check with any corporate distributor that tide up with us,

they will uniformly confirm that our distribution support is the best in the

industry. They feel these are the most important points for the success of

banc assurance model. We would be glad to discuss more details with your

team. Should you have any further clarifications needed we also invite yourteam to interact with our actuarial, underwriting, client servicing and IT

teams to see for themselves the high quality systems processes and skills

the company has.


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ICICI Bank Provides Various Types of Investments Plans

are:

MUTUAL FUNDS:

Mutual Funds pool money of various investors to purchase a wide variety ofsecurities while pursuing a specific goal. Selection of Securities for thepurpose is done by specialists from the field. Returns generated aredistributed to the Investors. At ICICI Bank NRI services, we will help youdetermine which types of funds you need to meet your investment goals.This may include the following types of funds:

1.Debt: Liquid schemes, Income schemes, G-sec schemes, Monthly Income

Schemes etc.

2. Equity: Diversified Equity Schemes, Sector Schemes, Index Schemes etc.

3. Hybrid Funds: Balanced Schemes, Special Schemes - Pension Schemes,Child education Schemes etc.

We help you identify an appropriate mix of Mutual Fund schemes for yourportfolio using asset allocation strategies. You can invest in various schemes

of multiple mutual funds with decent performance record.


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Why Invest in Mutual Fund?

Professional Money Management and Research:

Mutual funds are managed by professional fund managers who regularly

monitor market trends and economic trends for taking investment decisions.

They also have dedicated research professionals working with them who

make an in depth study of the investment option to take an informed

decision.

Risk Diversification:

Diversification reduces risk contained in a portfolio by spreading it. It is

about not putting all your eggs in one basket. As mutual funds have huge

corpuses to invest in, one can be part of a large and well-diversified portfolio

with very little investment.

Convenience:

With features like dematerialized account statements, easy subscription and

redemption processes, availability ofNAVs and performance details through

journals, newspapers and updates and lot more; Mutual Funds are sure a

convenient way of investing.

Liquidity:

One of the greatest advantages of Mutual Fund investment is liquidity.

Open-ended funds provide option to redeem on demand, which is extremely

beneficial especially during rising or falling Markets.


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Reduction in Costs:

Mutual funds have a pool of money that they have to invest. So they are

often involved in buying and selling of large amounts of securities that will

cost much lower than when you invest on your own.

Tax Advantages:

Investment in mutual funds also enjoys several tax advantages. Dividends

from Mutual Funds are tax-free in the hands of the investor (This however

depends upon changes in Finance Act). Also, capital gain accrued from

mutual funds investments for period of over one year is treated as long term

capital appreciation and is taxed at a lower rate of 10% without benefit of

indexation or 20% with benefit of indexation.

Other Advantages:

Indian Mutual fund industry also presents several other benefits to the

investor like: transparency - as funds have to make full disclosure of

investments on a periodic basis, flexibility in terms of needs based choices,

very well regulated by SEBI with very strict compliance requirements to

investor friendly norms.

Where to Invest?

ICICI Bank has tied up with several Mutual Funds so as to provide you the

convenience of Varied Investment.


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You have a choice to invest with the top 17 AMCs in India offering around

300 schemes

AMC offered

Alliance MutualFund

CholamandalamMutual Fund

DSP Merrill lynch Deutsche

Franklin Templeton HDFC HSBC ING Vysya

JM Financial Kotak mahindra Principal Prudential

Reliance Standard Chartered Sundram Tata

Birla

Why invest with us?

NRI Services offers investment in Mutual Funds through Multiple Channels.

With ICICI Bank, you can invest in Mutual Funds through following channels

- India Sales Team

- ETC Team (Email, Telephone & Chat Team)

- Wise Invest


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LIFE INSURANCE:

Being away from India doesn't mean you have to compromise the safety and

security of your loved ones. In fact, your savings from your time overseas

can be easily canalized to meet your family's needs - now and in the future.So, whether its your dream to retire in your hometown; to secure funds for

your children's education; or to build assets, ICICI Prudential has a range of

solutions that can be customized to meet your needs. Today, In Life

Insurance ULIP(Unit linked Insurance Plan) is most popular because it

provides good wealth creation and risk cover.

Broadly, insurance plans can be distinctly divided into ULIP (Unit Linked

Insurance Plans) and traditional plans. A brief detail of both segments:

Unit Linked Insurance Product

ULIPs have gained high acceptance due to attractive features they offer.

These include:

1.Flexibility

1. Flexibility to choose Sum Assured.

2. Flexibility to choose premium amount.

3. Option to change level of Premium /Sum Assured even after the

plan has started.

4. Flexibility to change asset allocation by switching between funds.

2.Transparency


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1. Charges in the plan & net amount invested are known to the

customer.

2. Convenience of tracking ones investment performance on a

daily basis.

3.Liquidity

1. Option to withdraw money after few years (comfort required in

case of exigency).

2. Low minimum tenure.

3. Partial / Systematic withdrawal allowed

4.Fund Options

1. A choice of funds (ranging from equity, debt, cash or a

combination).

2. Option to choose your fund mix based on desired asset allocation

There are some products of ULIP:

y Investment and Saving Plans

y Retirement Plans

y Child Plans

Investmentand Saving Plans:

Endowment policies are a good way of putting aside your savings today for a

future goal - whether it's to buy a house in India or fund your

entrepreneurial vision. Our savings-oriented policies are designed to make

your savings grow and have them available to you at the end of a fixed

number of years or through the term of the plan.


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y Lifetime Gold

y Lifetime Plus

y Lifetime Super

y Life Link Super

RetirementPlans:

Many of us picture ourselves enjoying the fruits of our labor after retirement

- going on a dream vacation, or helping our child's career take wing.

Financing all this will depend on our personal savings and investments, so its

important to save for the future from today. Our retirement plans are

designed to help you systematically save, so that you can enjoy all the

things you have dreamed of when you retire.

y Life Link Super pension

y Life Time SuperPension

y Life Time stage Pension

y

Foreve

rLife

y Premier Life Pension

Child Plans:

As a responsible parent, you want to ensure a hassle-free, successful life for

your child. However, life is full of uncertainties and even the best-laid plans

can go wrong. SmartKid Education Plans are designed to provide flexibility

and to safeguard your child's future education and lifestyle, taking allpossibilities into account. SmartKid Child Plans has a bouquet of three

products which can help you secure your

child's

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The image cannotbe displayed. Your computer may nothave enough memory to open the image, or the image may have been corrupted. Restartyour computer,and then open the file again. If the red x still appears, you may have todelete the image and then insert itagain.


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y SmartKid New Unit-Linked RegularPremium

y SmartKid New Unit-Linked Single Premium

y SmartKid RegularPremium

COMPARISON BETWEEN ULIP AND MUTUAL FUNDS

ULIP MUTUAL FUND

Most plan offer more than three

free funds switches every year

Switching is costly. Exit and entry

load and can be as high as 3-4%

There is no tax implication when

switching between funds

Profit from equity funds taxed at

10% debt profits added to income

Top-ups come with 1% charge Top-ups carry 2.25% charge

Good only for long term investing

because of high initial charge

Good for short term and long

term investing time frame

Life cover is compulsoryPure investing and life cover is

optional

You need to contribute regularly

for the long term

Investor not under any

compulsion to invest year after

year

There are various funds in mutual fund and ULIP:-

1.Maximiser: High risk funds and these funds in 100% share market

related and it provides 25%-35% earning.

2.Balancer : Moderate risk funds and these funds in40% Share Market

60% Share Market

15%-20% Earning


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3.Protector: Low risk funds and these funds in

Govt. Bonds

5%-8% Earning

4.Preserver: It also low risk funds and provides low earning too.

Call Money Market

4%-6% Earning

Best Performing ULIPs:

Name ReturnICICI Maximiser 29.80

KOTAK Growth 25.88

HDFC Growth 22.85

AVIVA Easy Life 22.26

BIRLA Enhance 13.38

(up to September 1,2007, figure in %)


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RESEARCHMETHODOLOGY


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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.

Primary data was collected using the following techniques:

Questionnaire method

Direct interview method

Observation method

The main tool used was the questionnaire method. Further direct

interview method, where a face to face formal interview will be taken. Lastly

observation method was used continuously with the questionnaire method,

as one continuously observes the surrounding environment he works in.


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Procedure of Research Methodology:

To conduct this research the target population was the people aware

or not aware from modern Investment plan like: Mutual Fund, Unit

Linked Insurance Plan, Systematic Investment Plan and Fixed Deposit

and paying tax.

Target geographic area was Jaipur. Sample size of 90 people was

taken

To these 90 people a questionnaire was given, the questionnaire was a

combination of both open ended and closed question.

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 given.

Sources of Secondary Data:

These source were use to obtain information on, ICICI Bank and other

competitors history, current issues, policies, procedures etc, wherever

required.

INTERNET

MAGZINES

NEWSPAPERS

JOURNALS


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DATA ANALYSIS


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DATA ANALYSIS

MARITAL STATUS NO.OF RESPONDANTS

MARRIED 65

UNMARRIED 25

SAMPLE SIZE 90

Graph No. 1

OBSERVATIONS:

65 samples are married out of 90 samples and they were more potential

customer.

No. of Respondents

65

25

0

10

20

30

40

50

60

70

MARRIED UNMARRIED


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PROFILE BASIS NO. OF RESPONDANTS

GOVT. EMPLOYEE 17

PVT. EMPLOYEE 32

SELF EMPLOYEE 41

SAMPLE SIZE 90

Graph No. 2

OBSERVATIONS:

In during my summer internship I observed that Pvt. And Self employedwere major prospective instead of govt. employee.

17

32

41

0

5

10

15

20

25

30

35

40

45

GOVT. EMPLOYEE PVT. EMPLOYEE SELF EMPLOYEE

No. of Respondants


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1. In which Sector do you prefer to invest your money?

PROFILE BASIS NO. OF RESPONDENTS

Private Sector 53

Government Sector 37

Total 90

Graph No. 3

OBSERVATION:

I field in my during my field work 59% samples were private sector whereas

41% samples were prefer to invest their money in government sector..

59%

41%

No. of Respondants

Pvt. Sector

Govt. Secotor


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2. Which type of Investment plan do you prefer?


a. Bank FD 16

b. ULIP(insurance products) 26

c. Mutual Fund 14

d. Stock Market 22

e. SIP(Systematic Investment Plan) 12

Graph No. 4

OBSERVATION:

y 26 sample out of 90 were preferred ULIP that is ULIP is more

preferable Investment product

y Secondly 22 sample out of 90 were preferred Invest in Stock Market.

0

5

10

15

20

25

30

Bank FD ULIP Mutual Fund Stock Market SIP

16

26

14

22

12

No. of Respondants


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3. How much term of Investment Plans do you like most?


a. 0-3 years 18

b. 3-6 years 35

c. 6-10 years 27

d. Above 10 years 10

Graph No. 5

OBSERVATION:

y 39% of samples preferred 3-6 years Investment while 30% people

preferred 6-10 years Investment.

20%

39%

30%

11%

No. of Respondants

0-3 years 3-6 years 6-10 years Above 10 years


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4. What do you see in long term Investment plans?


a. Growth 11

b. Risk Cover 09

c. Tax Benefit 18

d. All of the above 52

Graph No. 6

OBSERVATION:

y I observed that in during the summer project more than half of

respondents which 58% were interested in all of the above factors.

12%

10%

20%58%

No. of Respondents

Growth Risk Cover Tax Benefit All of the above


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5. How much risk do you prefer in Investment Plans?


a. High Risk 43b. Moderate Risk 31

c. Low Risk 16

Graph No. 7

OBSERVATION:

I found in during my training 48% preferred High risk whereas 34%samples preferred moderate risk while low risk sample were very low.

As I observed that max people are of below 30 they have willingnessto achieve high growth for fulfill their dreams and therefore, they wantto invest their money in pure equity market rather then debt or moneymarket

48%

34%

18%

No. of Respondents

High Risk

Moderate Risk

Low Risk


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6. Have you ever used Mutual Fund as an Investment before?


a. Yes 36

b. No 54

Graph No. 8

OBSERVATION:

I observed in during my training 54 samples never invest their money in MFs

while 36 samples invested their money in MFs.

36

54

No. of Respondents

Yes

No


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7. Do you consider Inflation a significant risk?


a. Yes 69

b. No 21

Graph No. 9

OBSERVATION:

I observed that people are not investing their money in market due toincreasing inflation so 77% were said Inflation is significant risk.

77%

23%

No. of Respondents

Yes

No


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8. Is a down period in the Stock Market a buying opportunity?


a. Yes 58

b. No 32

Graph No. 10

OBSERVATION:

64% believe that down period of stock market is a buying opportunity

because that time they can get more units instead of up period of

stock market.

64%

36%

No. of Respondents

Yes

No


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9. Is Private Life Insurance Company reliable for Investment?

PROFILE BASIS NO. OF RESPONDENTSa. Yes 51

b. No 39

Graph No. 11

OBSERVATION:

I observed that more than samples preferred private companies rather thangovt. for their better services.

51

39

No. of Respondents

Yes

No


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10. What are the factors on which Private Life Insurance

Company differs from LIC?


a. Service Quality 37

b. Flexibility 24

c. Maturity Period 13

d. Returns 16

Graph No. 12

OBSERVATION:

Respondents Percentage

Service Quality 37 41%

Flexibility 24 27%

Maturity 13 14%

Returns 16 18%

Total 90 100%

41%

27%

14%

18%

No. of Respondents

Service Quality Flexibility Maturity Returns


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11. Do you have any other Investment/Insurance policy?

PROFILE BASIS NO. OF RESPONDENTSa. Yes 67

b. No 23

Graph No. 13

OBSERVATION:

II observed that in during my training 81% has Investment plans alreadyand many of people has their policy from private companies rather thangovt. companies.

81%

19%

No. of Respondents

Yes

NO


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12. From which Company


a. ICICI Prudential 33

b. HDFC Standard Life 23

c. Bajaj Alianz 16

d. Other 18

Graph No. 14

OBSERVATION:

Respondents Percentage

ICICI Prudential 33 37%

HDFC Std. Life 23 25%

Bajaj Allianz 16 18%

Other 18 20%

Total 90 100%

37%

25%

18%

20%

No. of Respondents

ICICI Prudential HDFC Standard Life Bajaj Alianz Other


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OBSERVATION &

FINDINGS


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Observation & Findings

Maximum people were not ready to investment because they already

invested their money in March due to tax benefit.

The second reason was due to political uncertainty stock market is

highly volatile hence people were very scared for investment

Maximum people were interested in private sector for invest their

money.

The most of people made aware by Investment Promotion, Financial

Consultants and Agents.

Most of respondents admitted that they take plan or like to take

Investment plans because of its tax free nature.

Company is getting its most of business in Investment from ULIP and

Fixed deposit.

Respondents admitted that the product awareness which is provided

through intermediaries is high.

I observed that many of respondents agreed that down stock period is

a buying opportunity.

Product awareness of ICICI bank is very high.


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LIMITATION


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LIMITATION

Due to declined stage people were not interested to do investment.

Mostly people were opt Investment or insurance plans in march due to

tax saving because tax benefit is the most important factor for opting

Long term investment plans or insurance policies.

Some of the people provide false data as they were scared about

providing actual data.

Getting appointments with the people was difficult as most of the

people were busy and it was difficult to contact them again and again.


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RECOMMENDATIONS


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RECOMMENDATIONS:

The creation of awareness about the need and importance of modern

Investments is vital.

New product innovation, low money investment plans and better

service is crucial for the company to increase its market share.

Become more creative in capturing a wider range of customer by using

multiple distribution channels.

ICICI bank is giving more stress on employees and providing more

than enough target to employees which is very hard to achieve so

bank should give less stress and realistic target.

Bank should give speed to their market research process. For this they

should recruit young & enthusiast persons.


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CONCLUSION


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CONCLUSION

Change is very important and one whose goes which the changing

environment always succeeds, that is what I have learnt from the study. The

competition has grown too much in the Investment Sector with the opening

of the sector.

On the basis of the project I can conclude that today, the market

scenario is totally change because people becoming more aware about new

Investment plans which provides better growth and more tax benefit. In

earlier we invested our money in like FD, Kisan Vikas Patra, Providend fund,

Saving account and etc. but after some time of globalization we want to

invest our money in modern investment plans like Stock market, ULIP, MFs,

SIP, Commodities, Real Estate and etc. So people are moved gradually into

that financial market because it is more attractive.

when I joined the Summer Internship project that time market in the

declined scenario and inflation rate was going up everyday so I had to face

some difficulties for convinced to people for taking Investment because

people were scared to invest their money in financial market The another

factor is most of the people invested their money in march due to tax saving

and some of the people were not aware to ULIP and MFs.

However, It was a great experience for me because where I could

learn more about the banking culture and how the employees are working

and achieving the goal.


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BIBLIOGRAPHY


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BIBLIOGRAPHY

Reference Books

Marketing management : Philip Kotlar

Research and Methodology : C.K. Kothari

Direct Taxes : Dr. Vinod K. Singhania

&

: Dr. Kapil Singhania

Newspapers:

Times of India

Business Standard

Websites:

www.icicibank.com www.iciciprulife.com www.icicipruamc.com www.iloveindia.com

www.stockmaster.com

Search Engine:

www.google.com

www.wikipedia.com

Others:

ICICI Banks related products and manual


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ANNEXURE


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ANNEXURE

Name.

Occupation

Contact No....

Marital Status

1. In which Sector do you prefer to invest your money?

a. Private Sectorb. Government Sector

2. Which type of Investment plan do you prefer?f. Bank FDg. ULIP(insurance products)h. Mutual Fundi. Stock Market j. SIP(Systematic Investment Plan)

3. How much term of Investment Plans do you like most?e. 0-3 yearsf. 3-6 yearsg. 6-10 yearsh. Above 10 years

4. What do you see in long term Investment plans?e. Growth

f. Risk Coverg. Tax Benefith. All of the above


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5. How much risk do you prefer in Investment Plans?d. High Risk

e. Moderate Riskf. Low Risk

6. Have you ever used Mutual Fund as an Investment before?b. Yesc. No

7. Do you consider Inflation a significant risk?c. Yesd. No

8. Is a down period in the Stock Market a buying opportunity?c. Yesd. No

9. Is Private Life Insurance Company reliable for Investment?c. Yesd. No

10.What are the factors on which Private Life InsuranceCompany differs from LIC?

e. Service Qualityf. Flexibilityg. Maturity Periodh. Returns

11. Do you have any other Investment/Insurance policy?a Yes

study on changing scenario of investment in financial market

Documents