MINI PROJECT

ON

“Study On Changing Scenario of

Investment In Financial Market”

SUBMITTED TO

SCHOOL OF MANAGEMENT

SRM UNIVERSITY

UNDER THE GUIDANCE OF

PROF. VELUMURUGAN

BY
SHAILESH. D. MODI 3510940164
VINOTH. S 3510940200
SURESH.C 3510940208
KARTHIK KANNAN 3510940080
ASHOK KUMAR 3510940026
MALARVIZHI 3510910941

1
 ACKNOWLEDGEMENT

We 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.

We would like to thank Mr Darshan Saraf, Branch

Manager, for allowing me to carryout my project and
providing me constant support to this endeavor.

We express our sincere thanks to Mr. Velumurugan,

for giving us the opportunity to work on such
challenging projects. We also like to thank the
commuter’s help, without which it would not have
been possible to accomplish the project successfully.

2
 TABLE OF CONTENT

Sr. No. Topics Page No.

1. Executive Summary 4-6

2. Introduction 7-13

3. Objective & Scope 14

4. Industry Profile 15-21

5. Organization Profile 22-27

6. Product Profile 28-37

7. Research Methodology 38-39

8. Data Analysis 40-53

9. Observation & Findings 54

10. Limitations 55

11. Recommendations 56

12. Conclusions 57

13. Bibliography 58

14. Annexure 59-60

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 EXECUTIVE SUMMARY

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.

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.

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LIMITATION

 The unwillingness of the respondents to answer.

 When I started my training that time Market scenario was in
declined Stage.
 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.

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

MNC’s 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

5
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.

6
 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.

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:

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 • Invest early
• Invest regularly
• Invest for long term and not short term

What care should one take while investing?

Before making any investment, one must ensure to:

• obtain written documents explaining the investment

• read and understand such documents
• verify the legitimacy of the investment
• find out the costs and benefits associated with the investment
• assess the risk-return profile of the investment
• know the liquidity and safety aspects of the investment
• ascertain if it is appropriate for your specific goals
• compare these details with other investment opportunities
available
• examine if it fits in with other investments you are considering
• deal only through an authorized intermediary
• see all clarifications about the intermediary and the investment
• explore the options available to you if something were to go.
• and then, if satisfied, make the investment.
(These are called the Twelve Important Steps to Investing)

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 lender’s 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.

8
What factors determine interest rates?

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
economy related and are commonly referred to as macroeconomic
factors. Some of these factors are:
• Demand for money
• Level of Government borrowings
• Supply of money
• Inflation rate
The Reserve Bank of India and the Government policies which
determine some of the variables mentioned above

What are various options available for investment?

One may invest in:

• Physical assets like real estate, gold/jewellery, commodities

etc. and/or
• 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.

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Investment plan in the present scenario:

• Shares (NSE & BSE)

• Mutual Fund’s
• Insurance
• 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 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 CNX Nifty 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.

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 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.

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

11
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.

• 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.
•

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

12
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:

• Life protection
• Investment and Savings
• Flexibility
• Adjustable Life Cover
• Investment Options
• Transparency
• Options to take additional cover against
• Death due to accident
• Disability
• Critical Illness
• Surgeries
• Liquidity
• Tax planning

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 OBJECTIVE & SCOPE

Objective:

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.

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Contact Method:

 Telephone Interview
 Personal Interview

15
 INDUSTRY PROFILE

OVERVIEW 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 number of foreign companies listed in

16
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 world’s 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.

17
 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 MNC’s 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:

Risk and uncertainties are part of life’s and they will

never stop like accident, illness, theft and other uncertainties
they will happen in life suddenly and we can not manage our
expenses according to them. We will invest our money for
make 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.

19
Investment as “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.

TYPES OF INVESTMENT PLANS:

There are two types of Investment plans are exist. Most of the
products offered by Investment companies are developed and
structured around 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?

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Short Term Investment Plan:

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 Funds are 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 Investment Plans:

Public Provident Fund:

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

21
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.

22
 ORGNISATIONAL PROFILE

About the 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 for our 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.

24
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 of the issue:

The objects of the issue are to provide capital for

 Executing the bank’s business strategy, including growth in its

retail portfolio.
 International Expansion,
 Investment in its insurance subsidiaries, and
 Other general corporate purposes.

25
Introduction of ICICI Bank

ICICI Group

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

26
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 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

27
talent pool of ICICI and its subsidiaries. In October 2001, the Boards
of Directors 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.

28
 PRODUCT PROFILE

The ICICI Bank advantages:

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 on the 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.

29
Benefits from the 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 your team 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.

30
ICICI Bank Provides Various Types of Investments
Plans are:

MUTUAL FUNDS:
Mutual Funds pool money of various investors to purchase a wide
variety of securities while pursuing a specific goal. Selection of
Securities for the purpose is done by specialists from the field.
Returns generated are distributed to the Investors. At ICICI Bank NRI
services, we will help you determine 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

your portfolio using asset allocation strategies. You can invest in
various schemes of multiple mutual funds with decent performance
record.

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

31
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 of NAVs 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.

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:

32
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.

You have a choice to invest with the top 17 AMCs in India offering
around 300 schemes

AMC offered
• Alliance Mutual • Cholamandalam • DSP Merrill lynch • Deutsche
Fund Mutual Fund
• Franklin Templeton • HDFC • HSBC • ING Vysya
• JM Financial • Kotak mahindra • Principal • Prudential
• Reliance • Standard Chartered • Sundram • Tata
• Birla

33
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

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:

34
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
1. Charges in the plan & net amount invested are known to
the customer.
2. Convenience of tracking one’s 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:

• Investment and Saving Plans

• Retirement Plans
• Child Plans

35
Investment and 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.

• Lifetime Gold
• Lifetime Plus
• Lifetime Super
• Life Link Super

Retirement Plans:

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.

• Life Link Super pension

• Life Time Super Pension
• Life Time stage Pension
• Forever Life
• Premier Life Pension

36
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 all possibilities into account. SmartKid Child Plans
has a bouquet of three products which can help you secure your
child's

• SmartKid New Unit-Linked Regular Premium

• SmartKid New Unit-Linked Single Premium
• SmartKid Regular Premium

COMPARISON BETWEEN ULIP AND MUTUAL FUNDS

ULIP
Most plan offer more than three
free funds switches every year
There is no tax implication when
switching between funds
Top-ups come with 1% charge
Good only for long term investing
because of high initial charge
Life cover is compulsory
You need to contribute regularly
for the long term
MUTUAL FUND
Switching is costly. Exit and entry
load and can be as high as 3-4%
Profit from equity funds taxed at
10% debt profits added to income
Top-ups carry 2.25% charge
Good for short term and long
term investing time frame
Pure investing and life cover is
optional
Investor not under any
compulsion to invest year after
year

There are various funds in mutual fund and ULIP:-

37
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 in

40% Share Market

60% Share Market

15%-20% Earning
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 Return
ICICI 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 %)

RESEARCH METHODOLOGY

38
 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.

Procedure of Research Methodology:

39
  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

DATA ANALYSIS

40
MARITAL STATUS NO.OF RESPONDANTS
MARRIED 65
UNMARRIED 25
SAMPLE SIZE 90

Graph No. 1

No. of Respondents
70 65
60

50

40

30 25

20

10
0
MARRIED UNMARRIED

OBSERVATIONS:

41
 65 samples are married out of 90 samples and they were more
potential customer.

PROFILE BASIS NO. OF RESPONDANTS

GOVT. EMPLOYEE 17
PVT. EMPLOYEE 32
SELF EMPLOYEE 41
SAMPLE SIZE 90

Graph No. 2

No. of Respondants

45 41
40
35 32
30
25
20 17
15
10
5
0
GOVT. EMPLOYEE PVT. EMPLOYEE SELF EMPLOYEE

42
OBSERVATIONS:

In during my summer internship I observed that Pvt. And Self

employed were major prospective instead of govt. employee.

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

No. of Respondants

41%
Pvt. Sector
Govt. Secotor
59%

43
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. .

2. Which type of Investment plan do you prefer?

PROFILE BASIS NO. OF RESPONDENTS

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

No. of Respondants

30
26
25
22
20
16
14
15 12
10

0
Bank FD ULIP Mutual Fund Stock SIP
Market

44
OBSERVATION:

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

preferable Investment product
• Secondly 22 sample out of 90 were preferred Invest in Stock
Market.

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

PROFILE BASIS NO. OF RESPONDENTS

a. 0-3 years 18
b. 3-6 years 35
c. 6-10 years 27
d. Above 10 years 10

Graph No. 5

No. of Respondants

11% 20%

30%

39%

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

45
OBSERVATION:

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

people preferred 6-10 years Investment.

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

PROFILE BASIS NO. OF RESPONDENTS
a. Growth 11
b. Risk Cover 09
c. Tax Benefit 18
d. All of the above 52

Graph No. 6

No. of Respondents

12%

10%

58%
20%

Growth Risk Cover Tax Benefit All of the above

46
OBSERVATION:

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

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

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

PROFILE BASIS NO. OF RESPONDENTS
a. High Risk 43
b. Moderate Risk 31
c. Low Risk 16

Graph No. 7

No. of Respondents

18%

48% High Risk

Moderate Risk
Low Risk
34%

OBSERVATION:

 I found in during my training 48% preferred High risk whereas

34% samples preferred moderate risk while low risk sample
were very low.

47
  As I observed that max people are of below 30 they have
willingness to achieve high growth for fulfill their dreams and
therefore, they want to invest their money in pure equity
market rather then debt or money market

6. Have you ever used Mutual Fund as an Investment

before?
PROFILE BASIS NO. OF RESPONDENTS
a. Yes 36
b. No 54

Graph No. 8

No. of Respondents

36
Yes
No
54

OBSERVATION:
48
I observed in during my training 54 samples never invest their
money in MFs while 36 samples invested their money in MFs.

7. Do you consider Inflation a significant risk?

PROFILE BASIS NO. OF RESPONDENTS

a. Yes 69
b. No 21

Graph No. 9

No. of Respondents

23%

Yes
No

77%

OBSERVATION:

49
I observed that people are not investing their money in market due
to increasing inflation so 77% were said Inflation is significant risk.

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

opportunity?

PROFILE BASIS NO. OF RESPONDENTS

a. Yes 58
b. No 32

Graph No. 10

No. of Respondents

36%

Yes
No

64%

OBSERVATION:

50
 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.

9. Is Private Life Insurance Company reliable for

Investment?

PROFILE BASIS NO. OF RESPONDENTS

a. Yes 51
b. No 39
Graph No. 11

No. of Respondents

Yes

No

39
51

51
OBSERVATION:

I observed that more than samples preferred private companies

rather than govt. for their better services.

10. What are the factors on which Private Life Insurance

Company differs from LIC?

PROFILE BASIS NO. OF RESPONDENTS

a. Service Quality 37
b. Flexibility 24
c. Maturity Period 13
d. Returns 16
Graph No. 12

No. of Respondents

18%

41%

14%

27%

Service Quality Flexibility Maturity Returns

OBSERVATION:

52
 Respondents Percentage
Service Quality 37 41%
Flexibility 24 27%
Maturity 13 14%
Returns 16 18%
Total 90 100%

11. Do you have any other Investment/Insurance

policy?

PROFILE BASIS NO. OF RESPONDENTS

a. Yes 67
b. No 23

Graph No. 13

No. of Respondents

19%

Yes
NO

81%

OBSERVATION:

53
II observed that in during my training 81% has Investment plans
already and many of people has their policy from private companies
rather than govt. companies.

12. From which Company

PROFILE BASIS NO. OF RESPONDENTS

a. ICICI Prudential 33
b. HDFC Standard Life 23
c. Bajaj Alianz 16
d. Other 18

Graph No. 14

No. of Respondents

20%
37%

18%
25%

ICICI Prudential HDFC Standard Life Bajaj Alianz Other

54
OBSERVATION:

Respondents Percentage
ICICI Prudential 33 37%
HDFC Std. Life 23 25%
Bajaj Allianz 16 18%
Other 18 20%
Total 90 100%
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.

55
 I observed that many of respondents agreed that down stock
period is a buying opportunity.

 Product awareness of ICICI bank is very high.

56
 LIMITATION

 When I started my training that time Market scenario was in

declined Stage.

 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.

57
 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.

58
 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.

59
 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

60
 ANNEXURE

Name………………………………………….
Occupation……………………………………
Contact No…………………………………....
Marital Status…………………………………

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

a. Private Sector
b. Government Sector

2. Which type of Investment plan do you prefer?

f. Bank FD
g. ULIP(insurance products)
h. Mutual Fund
i. Stock Market
j. SIP(Systematic Investment Plan)

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

e. 0-3 years
f. 3-6 years
g. 6-10 years
h. Above 10 years

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

e. Growth
f. Risk Cover
g. Tax Benefit
h. All of the above

61
5. How much risk do you prefer in Investment Plans?
d. High Risk
e. Moderate Risk
f. Low Risk

6. Have you ever used Mutual Fund as an Investment

before?
b. Yes
c. No
7. Do you consider Inflation a significant risk?
c. Yes
d. No

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

opportunity?
c. Yes
d. No

9. Is Private Life Insurance Company reliable for

Investment?
c. Yes
d. No

10. What are the factors on which Private Life Insurance

Company differs from LIC?
e. Service Quality
f. Flexibility
g. Maturity Period
h. Returns

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

a. Yes
b. No

12. From which Company

e. ICICI Prudential
f. HDFC Standard Life
g. Bajaj Allianz

62
h. Other………………………………………

63