“A STUDY OF SATISFACTION LEVEL OF EQUITY
SUB-BROKERS”
AT
MOTILAL OSWAL SECURITIES LTD.,
(AHMEDABAD CITY)
A SUMMER PROJECT REPORT SUBMITTED IN THE PARTIAL
FULLFILLMENT OF AWARD OF MBA
(BATCH 2010-12)
SUBMITTED TO SUBMITTED BY
ANKIT SHAH TEJASH. JOSHI
(107240592052)
K.P PATEL SCHOOL OF MANAGEMENT & COMPUTER STUDIES
Kapadwanj, Gujarat, India
DECLARATION
Myself Tejas H. Joshi hereby declare that this project is the record of authentic work carried out by me, in well reputed company MOTOLAL OSWAL SECURITIES LIMITED during the academic year 2010-2011, under the guidance of. MR. ANKIT SHAH, faculty member K P PATEL SCHOOL OF MGT &COMPUTER STUDIES KAPADWANJ. This is my real work and has not been submitted to any other university or institute towards the award of any degree.
YOURS FAITHFULLY
PREFACE
In order to achieve Perfection, theoretical knowledge must be supplemented with practical knowledge and training. The basic objective of the summer internship is to bridge between theoretical knowledge and practical knowledge.
I know that training is for the development and enhancement of the knowledge in a particular field. It can never be possible to make a mark in today’s competitive era only with theoretical knowledge when industries are developing at global level, practical knowledge of administration and management of business is very important. Hence, practical study is of great importance to M.B.A. student.
With a view to expand the boundaries of thinking, I have undergone summer internship training program at MOTILAL OSWAL SECURITIES LTD. I have made deliberate efforts to collect the required information and fulfill training objective.
I consider myself very fortunate that I got an opportunity to work with an esteemed company like MOTILAL OSWAL SECURITIES LTD.
Place: KAPADWANJ
TEJAS H. JOSHI
Date: (107240592001)
ACKNOWLEDGMENT
Guidance, cooperation, and inspiration are the important factors in the accomplishment of an assigned task. I am most indebted to those mentioned below for their moral and active support.
At the outset, I profoundly thank to our college KSMCS for providing us with this opportunity and for all its cooperation and contribution. I also express my gratitude to our honorable Head of the Department. Mr.AJAY TIWARI and are highly thankful to my project guides Mr.ANKIT SHAH, and all others professors who helped me with the project. I am also thankful to other college staff that helped in my project
I am very thankful to Mr. M. K. JAYAPRAKASH SIR [ A.V.P. ( Acquisition) OF MOTILAL OSWAL SECURITIES LTD.] and Mr. PRATIK SANGHVI [ A.V.P (B.A.D.) MOTILAL OSWAL SECURITIES LTD.] who has given me such a nice opportunity to undergo the training and also very thankful to Mr. Hiral Raval [B.D.M of MOTILAL OSWAL SECURITIES LTD.] who is our external guide of my project, for giving me his valuable suggestions and guidance throughout the training period and would also like to thank the whole MOTILAL OSWAL staff for helping me in queries.
Finally, I am sincerely thankful to others who have directly or indirectly helped me in the completion of the project.
EXECUTIVE SUMMARY
As a part of our study, I did my project in “Motilal Oswal Securities Ltd.”. Basically, MOSL is in the broking industry providing a varied products and services to their clients. MOSL is one of the leading broking firms at National level.
In my summer internship I was given the project work on “A STUDY OF SATISFACTION LEVEL OF EQUITY SUB-BROKERS”- wherein I found the possibilities for MOSL’s business expansion via Franchisee in Ahmedabad city. For which I have done my practical study on sub-brokers survey in Ahmedabad city.
During my internship at MOSL, I also engaged myself in the work of searching for franchisee prospect. I found out address of various franchisees from NSE sub-brokers list and from the lead given by the visited sub-brokers themselves.
After finding out the address of franchisee, my starting point of research was visit them and took detailed information from them. I survey 150 sub-brokers and questioned them relating to the products & services provided by their brokers, departments with their present brokers, business development supports provided and required by them for their business development and other personal information. I also visited some of the leading regional brokers to make my selves more aware of the market scenario. I also discussed this with our research guides (the assistant branch manager and Business acquisition manager) and with also other staff of the branch.
From the data collected through questionnaire, I have found out the various marketing strategies, possibilities that MOSL can use for acquiring business in the future; in the other uncovered regions of Ahmedabad.
I have found that MOSL is enjoying good reported place in the market through its varied products and services, various department desk, its unique business models.
TABLE OF CONTENTS
S.No. Topic Page
No. I Certificate II Declaration III Acknowledgment IV Preface V Executive Summary Chapter 1 Introduction 1 1.1 Industry profile 4
1.1.1 Over the counter exchange of India 7
1.1.2 National Stock Exchange of India 7
1.1.3 Division of Share Market 8
1.1.4 Major Players in the broking Industry 11
1.2 Company Profile 12
1.2.1 Introduction 13
1.2.2 MOSL Four Companies 14
1.2.3 Organization Structure 15
1.2.4 Values 16
1.2.5 Management Team 17
1.2.6 Trading Department 22
1.2.7 H.R Department 22
1.2.8 Awards & Accolades 24
1.2.9 Services By MOSL 25
1.3 Product Profile 26
1.3.1 Products & Services 27
1.3.3 Stoke Market Review 36
1.4 Theoretical Aspects of Business 38
1.4.1 Percentage of Sub-broker in Each region 39
1.4.2 Business Model 40
Chapter 2 Research Methodology 45
2.1 Statement of Problem 46
2.2 Hypothesis 46
2.3 Objectives of Study 47
2.4 Utility of the Study 48
2.5 Research Design 48
2.6 Sample Design 49
2.7 Source Of Data 49
2.8 Limitation of the Study 49
2.9 Data Analysis & Interpretation 50
Chapter 3 Findings & Recommendation 68
Chapter 4 Conclusion 80
Chapter 5 Reference 82
1
CHAPTER 1
2
INTRODUCTION
Motilal Oswal Securities Ltd. (MOSL) was founded in 1987 as a small sub-broking unit, with just two people running the show. Focus on customer-first-attitude, ethical and transparent business practices, respect for professionalism, research-based value investing and implementation of cutting-edge technology has enabled us to blossom into an over 1600 member team.
Today Motilal Oswal has a well-diversified financial services firm offering a range of financial products and services such as Wealth Management, Broking & Distribution, Commodity Broking, Portfolio Management Services, Institutional Equities, Private Equity, Investment Banking Services and Principal Strategies.
It has a diversified client base that includes retail customers (including High Net worth Individuals), mutual funds, foreign institutional investors, financial institutions and corporate clients. It‟s headquartered in Mumbai and as of March 31st, 2011, had a network spread over 611 cities and towns comprising 1,644 Business Locations operated by our Business Partners and us. As at March 31st, 2011, MOSL had 709,041 registered customers
MOSL is one of the best companies among Indian domestic broking houses enjoying an unmatched and unparalleled brand recall. Motilal Oswal Securities Ltd. Is financially sound and have an excellent track record of consistent market growth in all key business segments.
Company is committed to give their customers the best services and holding to their core values which always place their client's interests first. These values are reflected in their business principles, which emphasize integrity, commitment to excellence, innovation and teamwork
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MOSL provide the solid research to their clients. As a part of project concern we are studying the business models and for the growth of business which is the tools being used and required by the sub-brokers.
So, this project aspires to know the competent market leaders, behavior of the individual client. This also helps us to know the preferences of the Sub-brokers to choose the main brokers so that they can provide good services according to the sub-brokers requirements to make more and more sub-sub-brokers, individual client and other HNI clients
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1.1. Industry Profile
Introduction:
The Indian financial services industry has experienced significant growth in the last few years. The Indian financial markets have considerably broadened and deepened due to various financial market reforms undertaken by the regulators. Introduction of innovative and diverse financial instruments and entry of large domestic players and sophisticated international players have triggered this growth.
None banking financial services sector, such as equities, derivatives and commodities brokerage, residential mortgage and insurance services, where new innovative products and expanding delivery channels have helped these sectors achieve high growth rates. Retail segment has grown multi-fold due to Regulatory reforms, diverse asset instruments, changing demographic profile, soft real interest rates and enhanced foreign participation (FIIs).
Finance and investment industry is playing a vital role for the development of the economy. Financial market in India is one of the oldest in the world and is considered to be the fastest growing and best among all the markets of the emerging economies. The history of Indian capital markets dates back 200 years toward the end of the 18th century when India was under the rule of the East India Company. The development of the capital market in India concentrated around Mumbai where no less than 200 to 250 securities brokers were active during the second half of the 19th century.
The financial market in India today is more developed than many other sectors because it was organized long before with the securities exchanges of Mumbai, Ahmedabad and Kolkata were established as early as the 19th century. By the early 1960s the total number of securities exchanges in India rose to eight, including Mumbai, Ahmedabad and Kolkata apart from Madras, Kanpur, Delhi, Bangalore and Pune. Today there are 21 regional securities exchanges in India in addition to the centralized NSE (National Stock Exchange) and OTCEI (Over the Counter Exchange of India).
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The international financial market over the world has grown very fast in the recent years. The private capital market is consistently improving since 1997. The buoyant capital flows among the nation's boundaries have raised the existing strength of the financial market domestically as well as internationally.
Trading Pattern of the Indian Stock Market
Trading in Indian stock exchanges is limited to listed securities of public limited companies. They are broadly divided into two categories, namely, specified securities (forward list) and non-specified securities (cash list). Equity shares of dividend paying, growth-oriented companies with a paid-up capital of at least Rs.50 million and a market capitalization of at least Rs.100 million and having more than 20,000 shareholders are, normally, put in the specified group and the balance in non-specified group.
Two types of transactions can be carried out on the Indian stock exchanges:
Spot delivery transactions "for delivery and payment within the time or on the date Stipulated when entering into the contract which shall not be more than 14 days following the date of the contract": and
Forward transactions "delivery and payment can be extended by further period of
14 days each so that the overall period does not exceed 90 days from the date of the contract". The latter is permitted only in the case of specified shares. The brokers who carry over the outstanding pay carry over charges (can tango or backwardation) which are usually determined by the rates of interest prevailing.
A member broker in an Indian stock exchange can act as an agent, buy and sell securities for his clients on a commission basis and also can act as a trader or dealer as a principal, buy and sell securities on his own account and risk, in contrast with the practice prevailing on New York and London Stock Exchanges, where a member can act as a jobber or a broker only.
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The nature of trading on Indian Stock Exchanges are that of age old conventional style of face-to-face trading with bids and offers being made by open outcry. However, there is a great amount of effort to modernize the Indian stock exchanges in the very recent times.
1.1.1
Over The Counter Exchange of India (OTCEI)
The traditional trading mechanism prevailed in the Indian stock markets gave way to many functional inefficiencies, such as, absence of liquidity, lack of transparency, unduly long settlement periods and benami transactions, which affected the small investors to a great extent. To provide improved services to investors, the country's first ring less, scrip less, electronic stock exchange - OTCEI - was created in 1992 by country's premier financial institutions - Unit Trust of India, Industrial Credit and Investment Corporation of India, Industrial Development Bank of India, SBI Capital Markets, Industrial Finance Corporation of India, General Insurance Corporation and its subsidiaries and Can Bank Financial Services.
Trading at OTCEI is done over the centers spread across the country. Securities traded on the OTCEI are classified into: Listed Securities, Permitted Securities, Initiated debentures.
OTC has a unique feature of trading compared to other traditional exchanges. That is, certificates of listed securities and initiated debentures are not traded at OTC. The original certificate will be safely with the custodian. But, a counter receipt is generated out at the counter which substitutes the share certificate and is used for all transactions.7
1.1.2 National Stock Exchange (NSE)
With the liberalization of the Indian economy, it was found inevitable to lift the Indian stock market trading system on par with the international standards. On the basis of the recommendations of high powered Pherwani Committee, the National Stock Exchange was incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and Investment Corporation of India, Industrial Finance Corporation of India, all Insurance Corporations, selected commercial banks and others.
Trading at NSE can be classified under two broad categories: 1) Wholesale debt market 2) Capital market.
Wholesale debt market operations are similar to money market operations - institutions and corporate bodies enter into high value transactions in financial instruments such as government securities, treasury bills, public sector unit bonds, commercial paper, certificate of deposit, etc.There are two kinds of players in NSE: 1) Trading members and
2) Participants.
Recognized members of NSE are called trading members who trade on behalf of themselves and their clients. Participants include trading members and large players like banks who take direct settlement responsibility.
Trading at NSE takes place through a fully automated screen-based trading mechanism which adopts the principle of an order-driven market. Trading members can stay at their offices and execute the trading, since they are linked through a communication network. The prices at which the buyer and seller are willing to transact will appear on the screen. When the prices match the transaction will be completed and a confirmation slip will be printed at the office of the trading member.8
1.1.3 Basically, Share Market can be divided into two parts
Primary Market It is the market where new issues of securities are offered to the investors.
Secondary Market An investor of a secondary market buys a security from another participant of the same and not from any issuing corporation (as in case of Primary MarketDifference between Primary and Secondary Markets
In the primary market securities are issued to the public and the proceeds go to the issuing company. Secondary market is a term used for stock exchanges, where stocks are bought and sold after they are issued to the public.
Company Owners
Company
IPO
Individuals apply to get shares of the company
Companies share ownership by issuing share
Primary market
Companies allocate shares to individuals and those who get the shares become part owners of the company.
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Secondary Market
Company
Companies get themselves listed on popular stock exchanges like BSE and NSE
Broker Stock
Exchange Individual
10 CUSTOMER SUPPORT
SMS
Email Live chat Relationship Manager Call centre Website Multi Channel Investment Option Online TradingShare Shops Dial n Trade
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1.1.4 Major Players in the Broking Industry
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COMPANY
PROFILE
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1.2.1 Introduction of Motilal Oswal Securities Ltd
The story of Motilal Oswal Securities Ltd (MOSL) goes back many years, when Mr. Motilal Oswal and Mr. Raamdeo Agrawal met each other as students in a Mumbai suburban hostel in the early eighties. Both the young chartered accountants hailing from a rural & an unpretentious background had a common dream viz 'to build a professional organization with strong value systems, to provide reliable & honest investment advice to investors'. Thus was born their first enterprise called "Prudential Portfolio Services" in 1987. Motilal Oswal Securities Ltd. was founded in 1987 as a small sub-broking unit, with just two people running the show. Focus on customer-first-attitude, ethical and transparent business practices, respect for professionalism, research-based value investing and implementation of cutting-edge technology has enabled us to blossom into an almost 1600 member team.
Today MOSL is a well-diversified financial services firm offering a range of financial products and services such as Wealth Management, Broking & Distribution, Commodity Broking, Portfolio Management Services , Institutional Equities, Private Equity , Investment Banking Services and Principal Strategies.
MOSL have a diversified client base that includes retail customers (including High Net worth Individuals), mutual funds, foreign institutional investors, financial institutions and corporate clients. MOSL‟s headquartered in Mumbai and as of March 31st, 2010, had a network spread over 611 cities and towns comprising 1,644 Business Locations operated by our Business Partners and us. As at March 31st, 2010, MOSL had 709,041 registered customers.
Motilal Oswal Financial Services is a well-diversified financial services group having businesses in securities, commodities, investment banking and capital venture With over 1,644 business locations and more than 709,041 customers in over 611 cities, Motilal Oswal is well suited to handle all your wealth creation and wealth management needs. These solutions are provided by a force of over 1600 employees and over 808 Business Associates14
1.2.2 Motilal Oswal Financial Services Ltd consists of four
companies
Motilal Oswal Investment Advisors Pvt. Ltd. is our Investment Banking arm withcollective experience of over 100 years in investment banking/corporate banking and advisory services
Motilal Oswal Commodities Broker (P) Ltd. has been providing commodity tradingfacilities and related products and services since 2004.
Motilal Oswal Venture Capital Advisors Private Limited has launched the IndiaBusiness Excellence Fund (IBEF); a US$100 mn India focused Private Equity Fund.
Motilal Oswal Securities Ltd. (MOSL) is a leading research and advisory basedstock broking house of India, with a dominant position in both institutional equities and wealth management. Our services include equities, derivatives, e-broking, portfolio management, mutual funds, commodities, IPOs and depository services.
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1.2.3 Organizational Structure:-
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1.2.4 VALUES
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Mr. Motilal Oswal
CMD, MOSL
1.2.5 Management Team:-
Mr. Motilal Oswal is the Chairman and Managing Director of Motilal Oswal Financial Services Ltd. (MOFSL). He is a Chartered Accountant and started the business along with co-promoter, Mr. Raamdeo Agrawal in 1987.
Mr. Oswal has received the Rashtriya Samman Patra awarded by the Government of India for being amongst the highest income tax payers in the country for a period of 5 years from FY95–FY99.
Mr. Oswal has served on the governing board of the Bombay Stock Exchange (BSE) as well as IMC and also has served on many committees of BSE, NSE, SEBI and CDSL. He is also a board member and a Director of Jain International Trade Organisation (JITO).18
The Indian Council of Management Executives (ICME) has awarded the Knight of the Millennium to Mr. Oswal for the Capital Market
Recently, Mr. Oswal was conferred the “Udyog Rattan Award” for his outstanding performance in the industrial development of the country by the Institute of Economic Studies, New Delhi. He has also been inducted into The Hall of Fame for excellence in Franchising by the Franchising World Magazine. He is also awarded as the Champion of Arthshastra by the Rotary District and the Excellent Business Achiever in Financial Services Award by the Institute of Chartered Accountants of India.
Motilal Oswal Financial Services group activities include Wealth Management, Investment Banking, Institutional Broking, Private Equity and Asset Management with operations in 1644 outlets in over 611 cities and more than 709,041 customers. The company's employee‟s strength is about 1500 people including 600 MBAs, Engineers and Chartered Accountants etc.
In the year 2006 and 2007, Asia Money Brokers Poll has rated Motilal Oswal Securities as the country's Best Local Research Company. It was also ranked as the Best Brokerage in the ET Now – Starmine Analysts Awards 2009 and among the top 2 Local Brokerages in the AsiaMoney and Institutional Investor Brokerage polls.
In the year 2008, NASCOM – CNBC – TV18 rated Motilal Oswal as the Best IT User Award for the Financial Services Category. Franchisee World Magazine the most coveted award in the retail and franchising industry rated Motilal Oswal as “The Best Franchisee in Financial Services” for the second year in succession.19
Mr. Raamdeo Agrawal
JMD, MOSL
MD, MOSL
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Mr. Raamdeo Agrawal is the man behind the strong research capabilities at Motilal Oswal Financial Services Ltd. He is an Associate of Institute of Chartered Accountants of India and also a member of the National Committee on Capital Markets of the Confederation of Indian Industry.
Mr. Agrawal specialises in equity research. He has been authoring the annual Motilal Oswal Wealth Creation Study since its inception in 1996. In 1986, he wrote the book „Corporate Numbers Game‟, along with co-author, Mr. Ram K Piparia. He has also featured on 'Wizards of Dalal Street on CNBC TV 18'.
Mr. Agrawal has received the "Rashtriya Samman Patra" awarded by the Government of India for being amongst the highest Income Tax payers in the country for a period of 5 years from FY95–FY99.
20
Navin Agrawal Ashutosh Maheshvari Director, MOFSL CEO, MOFSL
21
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1.2.6 TRADING DEPARTMENT
Motilal Oswal is one of the broker who is acting as wholesalers and as a broker, it is the duty of it to provide service of collecting funds and securities from the investors and send it to clearing house and vice versa. According to SEBI investor has to open trading account for trading in shares. Client can open an account in any depository.
Trading department is divided into three parts: Pre-trading (A/c opening, Deposits, etc) Trading (Dealing room, Sauda punching, conformation)
Post-trading (Payout process, Bills, Pay-in-process, Contract note)
1.2.7 HUMAN RESOURCE DEPARTMENT
MOFSL has grown at a scorching pace, not only in terms of business but also in terms of its most valuable asset -people. They have an ever-growing employee strength of 2315 associates that operates out of a rapidly expanding Company network.
HR at Motilal Oswal, on the one hand strives to make every employee of the organization its brand ambassador and on the other hand make the Motilal Oswal brand stand for the best people practices.The 3 pillars of HR strategy are:
(1) A clear and relentless (persistent) focus on leadership development
(2) Stringent (severe) focus on the identification and development of 'High
Potentials' at all levels
(3) Investment in technology to deliver state-of-the-art HR processes across the
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The key initiatives towards implementation of the strategy have been:
Balanced Scorecard and KRA implementation:
Leadership Development:
Style and competency assessment for the top tier management of the Company was carried out and an intensive Executive Coaching programme based on Individual Development Plans has been started for 13 of the top leaders of the organization.
Technology:
The recruitment process has been enabled and implemented using the existing HR software of My Zone. This has been implemented in Mumbai during the current year and will be rolled out across all regions during this year.
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1.2.8 Awards and Accolades :
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1.2.9 Services offering by MOSL:
International & local
International capital Acquisition finance
market arrangement, LBO etc,
International & domestic
SYNDICATION STRUCTURED FINANCE DOMESTIC IPOs RESTRUCTURING CORPORATE FINANCE ADVISORY PRIVATE EQUITY PLACEMENT M&A ADVISORY FCCBs & GDRs
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PRODUCT
PROFILE
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1.3.1 Product and services
In keeping with its tradition of personalized service, Motilal Oswal Securities Limited provides Customized Equity Advisory Group to clients based on their profile. Equity Research is an inherent strength of MOSL. Converting that research to advice is the main function of Equity Advisory. Investors are presented with well researched opportunities in companies which will grow in both market perceived value and growth. Along side, the trading fraternity is catered to with ideas induced by Technical analysis and news flow analysis. The investment ideas identified by the research team are presented and communicated with conviction to our clients by our advisory team.
Our advisory team has highly trained equity professionals, who act as your Equity Advisor. MOSL Equity Advisor proactively helps you take informed equity investment decisions and build a healthy portfolio giving the best fit to your investment and trading needs.
The MOSL Equity Advisory Group is based in Mumbai at largest dealing and advisory floor of India. This centralized advisory team caters to peculiar Investment need of every HNI & MNI client and business partner; in a seamless, speedy and reliable manner using state-of-the-art technology and telecommunication infrastructure.
MOSL Equity Advisors are equipped with the knowledge and prudence making sure that every rupee deployed works the hardest it can. Your advisors play the part of a guide ushering you on a swift wealth creation ride. The sheer strength of our advisory creates synergy for seamless flow of Investment support.
To improve the overall experience while the clients interact with our advisors, MOSL have implemented a contact center solution, Drishti, in our dealing room. Among other benefits, this solution helps advisors to manage their client base more efficiently and effectively. The system provides a single number contact to all our clients as well as a single click auto-dial for advisors without having to remember their contact details.
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1. Wealth Management and Broking & Distribution :
MOSL offer Wealth Management Services, Broking & third party products to retail customers through MOFSL, MOSL and MOCBPL. MOSL also provide financing services, investment advisory, financial planning and portfolio management services (PMS) to our clients. As at June 30, 2009, MOSL had 5, 57,373 registered customers, to whom MOSL provide equity & commodities brokerage and PMS.
As at June 30, 2010, MOFSL had a total of 4, 86,571 depository clients. MOSL classify our clients into two segments - 'mass retail' and 'high net worth' (addressed by a separate offering called 'Purple'). MOSL offer our clients investment products across the major asset classes including equities, derivatives, and commodities and distribute third-party products such as mutual fund schemes and primary equity offerings. MOSL distribute these products through our business locations and our online channel.
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2. Institutional Broking
MOSL offer equity broking services in the cash and derivative segments through MOSL to institutional clients in India and overseas.
These clients include companies, mutual funds, banks, financial institutions, insurance companies, and FIIs. As at June 30, 2009, MOSL were empanelled with over 300 institutional clients including 200 FIIs.
MOSL service these clients through dedicated sales teams across different time zones.
3
.Investment Banking
MOSL offer financial advisory services relating to mergers and acquisitions (domestic and cross-border), divestitures, restructurings and spin-offs through MOIAPL.
MOSL also offer capital raising and other investment banking services such as the management of public offerings, private placements (including qualified institutional placements), rights issues, share buybacks, open offers/delisting and syndication of debt and equity.
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4. Private Equity
In 2006, our private equity subsidiary, MOPEAPL was appointed as the investment manager and advisor to a private equity fund, India Business Excellence Fund, which was launched with a target of raising US$100 million. The fund is aimed at providing growth capital to small and medium enterprises in India, with investments typically in the range of US$3 million to US$7 million. In its final closing, in December 2007, the fund obtained commitments of US$125 million (Rs.4, 875 million) from investors in India and overseas. US$31 million of these funds have already been deployed across six deals and the fund is in advanced stages of closing three more deals, aggregating to US$30 million.
MOFSL is sponsoring India Reality Excellence Fund (”IREF”), an INR 750 crores Private Equity Real Estate Fund. MOPEAPL will be the investment manager and advisor to the fund.
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5. Asset Management
Our Portfolio Management Services (PMS) are offered through MOSL. As on 30th June, 2009, assets under management for this business were Rs. 6.8 bn. For the PMS business, MOSL have a 5 member fund management team; they are supported by MOSL Research Team of 27research analysts.
MOSL have received an in-principle approval from Securities Exchange Board of India (SEBI) to set up a mutual fund business in India, through our promoter company, Passionate Investment Management Private Ltd.
MOSL feel that there is a huge opportunity for new entrants as the industry is still in its nascent stage in terms of AUM size, number of players and number of schemes, when analyzing and comparing it with countries like Brazil and other emerging economies. MOSL will grow our asset management business by leveraging our existing investment management capabilities in managing funds, our strong research and a large in-house retail franchise network to spread our reach and capture the investment potential in India and abroad.
6. Broking & Distribution services
Equity (cash and derivatives) Commodity Broking
Portfolio Management Services
Distribution of financial products
Financing
Depository Services
IPO distribution
MOSL offer these services through our branches, Business Partner locations, the internet and mobile channels. MOSL also have strategic tie-ups with State Bank of India and IDBI Bank to offer our online trading platform to its customers.
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7.
Commodity Broking
Through Motilal Oswal Commodities Broker (P) Ltd our fully owned subsidiary; we provide commodity trading facilities and related products and services on MCX and NCDEX. Besides access to the best of research in the form of Daily Fundamentals & Technical Reports on highly traded commodities, our clients also get access to our exclusive Customized Trading Advice on both the trading platforms. MOSL offer these services through our branches, Business Partner locations, the internet and mobile channels.
8. Mutual Fund
At Motilal Oswal Securities Ltd, they understand the importance of financial goals of their privileged clients and provide them comprehensive solutions to all your financial needs. Through their tailor made portfolios, they serve clients needs better and help them and make informed investment decisions. Their dedicated Mutual fund desk gives clients Solid advice backed services thus giving them the edge that they always wanted.
9. IPO’s
Book Building and Fixed Price Issue are the two types of Initial Public Offerings (IPO‟s) through which a public company can raise money in the capital market.
10. My Broker
Motilal Oswal Securities Limited provides a platform of becoming our own broker with complete research support from MOSL which helps us to make right decision at right time. MOSL can choose our trading a/c which suits our trading habit‟s & preference and trade anywhere, anytime. Buying and selling is as easy as click of a button.
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1.3.2 NEW OFFERINGS:
MOST SHARES M 50 (Act like funds and trade like shares)
Motilal Oswal has launched India‟s first fundamentally weighted ETF based on S&P CNX NIFTY Index – An open ended exchange traded fund.
MOST Shares M 50 takes the NIFTY 50 constituents and remixed them in a different proportion using Motilal AMC‟s pre-defines methodology; based on fundamental performance and valuation
MOST Share M 50 is an open ended exchange traded fund giving the investors the benefits of investing in a mutual fund that trade like a share i.e. a diversified blue chip portfolio, real time liquidity and prices.
Exchange Traded Fund:
ETFs are just what their name implies: baskets of securities that are traded, like
Individual stocks, on an exchange. Unlike regular open-end mutual funds, ETFs can be bought and sold throughout the trading day like any stock.
Advantages of Most M50:
Higher allocation to stocks with superior fundamentals and reasonable valuation.
Combines the benefits of passive allocation and active execution
Lower cost structure (apprx 1% against 2%) as compared to the traditional investment product.
No entry/exit load
Tax efficient exposure to the “market”.
Complete transparency with daily portfolio exposure.35
Uses of Most Shares M50:
All types of investors i.e. Retail or Institutional, Long term or short term can use the Most shares M50 for the following strategies:-
1. Investing 2. Trading 3. Hedging 4. Arbitrage
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1.3.3 STOCK MARKET REVIEW
MOSL is known for its equity research ideas. Asia Money Broker's Polls have consistently rated our research as one of the best in the industry. Our annual Study onWealth Creation , authored by Mr. Raamdeo Agrawal, is keenly awaited by investors across the globe. While „Winner Category and Category Winners‟ was the theme for the 2009 study, the 2010 study talked about „Creating Wealth from the Unknown and Unknowable‟.
Bargains are found when markets are blind to large business opportunity, positive changes or sustained growth; losses are guaranteed when one grossly overpays
India‟s next trillion dollar journey will see distinctly buoyant corporate profits, and boom in savings and investment
At current valuations, margin of safety in the market is low. However, very high liquidity can lift the market to rich levels of valuation for quite some time
Our Quarterly Results Preview Compendium, which MOSL also publish in the form of a pocket size book, is immensely popular. Published well before the first results announcements hit the market, it serves as a useful guide through the results season. Some of the noteworthy features that make it a unique product offering are:
A clearly spelt-out India Strategy
Updates on all the sectors under our coverage
Quarterly and annual estimates on all companies under MOSL coverage
Tear-away ready reckoners
MOSL Results Updates are amongst the most comprehensive on the street and are yet amongst the quickest to reach MOSL clients.
MOSL have a universe of over 225 stocks. While MOSL service our clients regularly through updates on each company under MOSL coverage, MOSL have also been helping them create wealth by identifying trends early and uncovering interesting wealth creation ideas. MOSL have analysts covering 25+ sectors and commodities.37
Thematic Sector Company Market Analysis
Regular Expert Speak Industry Update Initiating Coverage EcoScope Travelog Company Updates Ground Reality Wall of Worry Re-initiating
Coverage Conferences /
Events Corner Office Elections InSites Policy Maker
Annually Budget Annual Report Update Wealth Creation
Study
Quarterly India Strategy
Report Results Preview Results Update /
Review Holding Report
Monthly MPower AMC Holdings MOSL Wealth Auto Dasboard Derivatives Roll Over Tele Talk Time
Indian Airports Ports Power Generation
Gasoline
Weekly Pivot Metals Weekly MOSL 3X3 Commodity Weekly Week in a Nutshell Valuation Guide MOSL LongShort
MOSL Weekly
Daily MOSL Derivatives
Daily Margin Update Commodity Daily
Corporate News Market Diary MOSL Market Action
38
THEORITICAL
ASPECT OF
39
1.4.1 Percentage of sub – brokers present in each region
Interpretation
Here the above graph indicates the presence of sub-brokers in Ahmedabad region. MOSL can see that here 60% of the sub-broker are in south region, 31% of the sub-broker are in west region, 8% of the sub- broker are in north region, and 1% of the sub-broker are in east region.
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1.4.2 BUSINESS MODELS
Hybrid Models:
At MOSL MOSL believe in treating their sub-brokers business as if were their own. In this true spirit of partnership MOSL have set up a dedicated team of Business Development Manager (BDM) who function as part of the sub-broker team.The BDM would help sub-brokers in the following ways:--
Joint sales meeting for acquiring HNI customers-
Establishing Systems & Processes-
Conducting Seminars & Investors meet-
Business Plan Preparation- Dealers - Relationship Managers - MOSL Business Development officers - Customer Service - Infrastructure - Dealing Terminals - Connectivity
- Regional MOSL support Team -Brand -Marketing Support - Advisory Support -Dedicated Advisors -Investment Ideas -Inactive to Active -Business Development -Sales Support -Training
-Systems & Process Dev -Performance Training -Back office -Centralized RMS
C
u
sto
mer
Products offered: - Equity, Commodity, PMS and Mutual Fund
MOSL
Franchise
41
A person with good track record & reputation in financial services/other business/social circles with a good client base
Minimum 2-3 years’ experience in selling financial products as main broker/sub broker/Remise/Mutual fund distributor/Insurance advisor/Financial planner or an employee of existing broker/sub broker
Capacity to invest minimum 5-10 lacs
initially and ability to invest continuously in infrastructure and people.
Willingness to design office premises in accordance with the policies laid down by MOSL
A person with a good track record & reputation in financial services/other business/social circles with a good client base
Minimum 2-3 years of experience in selling financial products
Capacity to invest minimum 2 lacs
Sub broker Remisier/sub
broker
42 BSE,NSE,NSE F&O, BSE
F&O, NCDEX, NDSL, CDSL, E trading PMS Mutual fund
One relationship manager will be assigned to you for your regular research advice & market updates through chat –phone-emails
Marketing and business development support on a regular basis
Start up kit comprising of glow sign flex, visiting cards, marketing broachers etc will be provided by MOSL to help kick start the business.
One customer service executive will be assigned to you for your routine queries through chat-phone-emails
Centralized web based back office access will be provided
Offerings to sub broker
Product support Marketing & sales support
43 BSE,NSE,NSE
F&O, BSE F&O, NCDEX, NDSL, CDSL, E trading PMS Mutual fund
Trading terminal with Orion
software(BSE/NSE) Dealing desk
Direct Landline Phone Conference room
Research advice & market updates through chat phone emails Issuing contract notes/bills to end clients Online risk management software & back office software
Unique offerings for a special partnership
Multiple Products BSE,NSE,NSE F&O,BSE F&O,NCDEX,NSDL,CDSL,e broking, PMS,MF(direct & exchange traded),Private equity, margin funding**, distribution of IPO**,distribution of insurance**
Infrastructure Support
State of the art offices with experienced managers Trading terminal NSE & BSE
Dealing desk
Direct landline phone Conference facilities Research Morning calls
Interaction with research desk Sector specific reports
Research access thorou7gh uppermost portal Advisory support Centralized advisory support
Dedicated advisor
Offerings to Remisier
Product support Infrastructure Support
Sales support Back office support
44 Trading software Equity CTCL Id- orion
E broking CTCL Id: My broker Commodities CTCL: ODIN Business
development support
Dedicated team of business development managers who assist your business growth
Business conversion support
Dedicated team to provide operational training & helps in converting business
Service support One customer executive will be assigned to you for your routine queries through phone – emails
RMS Online risk management software & back office software Single rms software for online and offline clients
Connectivity Thorough VPN Through VSAT
Idea dashboard Unique online platform for daily dissemination of research recommendation
Quarterly business review
Comprehensive business review to under stand your business progress and suggest suitable action points
Mini admin terminal clients Limits can be directly set by BA (Deposit based)
Digital services digital contract notes, Auction bills, Leon and SSTT Certificates Rewards and
recognition
Unique business partner Fraternity Program- UPPERMOST
Technical analysis software
45
CHAPTER 2
RESEARCH
46
2.1 STATEMENT OF PROBLEM
What can be done towards sub-broker satisfaction and sub-broker loyalty?
How to capture new market segments and what are the needs and expectations of these segments?
Despite of having well drawn plan on sub broker by qualified management team why such kind of the problems arises between the sub-broker & Broker.
What do the existing franchisees feel about the overall product?2.2 HYPOTHESIS
Ho: The number of years in a broking firms are not depended on revenue growth. H1: The number of the years in a broking firms are depended on revenue growth
YEARS REVENUE GROWTH TOTAL
LEAST PREFERED MOST PREFERED < 5 Years 17 75 92 6 to 10 Years 3 35 38 11 to 15 Years 3 7 10 >15 Years 3 7 10 TOTAL 26 124 150
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Chi-Square Tests
Pearson Chi-Square Value Df Asymp. Sig. (2-sided) 4.686a 3 0.196CONCLUSION
Here chi-square value is 0.196 , Which is greater than 0.05 ( P value) So, 0.196 > 0.05
So, Here There is a significant relation between number of years in broking firm and revenue growth.
So Ho is not rejected.
2.3 OBJECTIVE OF STUDY
To study the preferences of sub-brokers in Ahmedabad city, regarding wide range of the products, services and support tools.
To understand whether sub-brokers are satisfied with the business developments and supports being provided to them by their present main brokers in Ahmedabad.
To understand the gap between sub-brokers‟ expectations & main brokers‟ perceptions.48
2.4 SIGNIFICANCE OF STUDY
This will also help MOSL to select right tools for approaching the prospects, to give knowledge of the products & services and other business development supports.
This will also help MOSL to make out the brand awareness at regional level.
This study will provide the knowledge to MOSL to reframe the policies as per requirements of the regional sub-brokers.
This study also helps MOSL to get knowledge of competitors strategy towards their sub-brokers.2.5 RESEARCH DESIGN
A research design is defined, as the specification of methods and procedures for acquiring the Information needed. It is a plant or organizing framework for doing the study and collecting the data. Designing a research plan requires decisions all the data sources, research approaches, Research instruments, sampling plan and contact methods.
DESCRIPTIVE STUDIES
Descriptive research in contrast to exploratory research is marked by the prior formulation of specific research Questions.
The investigator already knows a substantial amount about the research problem.
49
2.6 SAMPLING DESIGN
Sample size : 150
Sampling method: Convenient Sampling:
Because of limited time and money, I have selected convenient sampling method
(Non Random Sampling) But, MOSL have not found much difference in findings gained from different areas. So it shows enough validity of the research.
Research Instruments : Questionnaire (attached in Annexure)
Geographical Scope: Ahmedabad city
Population: Equity Sub-Broker in Ahmedabad city
2.7 SOURCE OF DATA:
Primary: Primary data is collected by visiting various persons who are connected with broking industry through surveys/questionnaires, interviews.
Secondary: Company material, websites, research reports, yellow pages
2.8 Limitation of the study
People not give good response
We have to work under the company guidelines & task which has given to me
Only 150 people was as a sample size from actual population ,so it is may be wrong decision to take.
50
2.9 DATA ANALYSIS & INTERPRETATION
1) Number of years of sub-broker in broking Business.
INTERPRETATION
The above graph indicates that 99 respondents out of 150 are from less than 5 years in this business and only 8 respondents are in this business from last 15 years.
0 20 40 60 80 100 120 140 160 180
< 5 years 6 - 10 year 11 - 15 year > 15 years 99 36 7 8 0.66 % 0.24 % 0.045 % 0.05 %
No. of years of current setup
NO. OF YEARS
RESPONDENT
%
< 5 years 99 66
6 - 10 year 36 24
11 - 15 year 7 4.67
> 15 years 8 5.33
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2) Products & Services provided to Sub-Broker by their main Broker.
PRODUCTS AND SERVICES
RESPONDENT
%
Equity 146 26.35 Commodity 82 14.80 Insurance 58 10.47 IPO 91 16.426 PMS 48 8.66 Currency 48 8.66 mutual fund 59 10.65 marin of funding 15 2.71 any other 7 1.27 TOTAL 554 100 INTERPRETATION
Out of 150 respondents 146 Sub-Broker were provided equity product by their broker. And also only 15 Sub-Brokers are provided Margin of funding.
So, Motilal has the opportunity to focus on the products which are less popular products like margin of funding, this provides MOSL potentials for acquiring more and more business.
0 20 40 60 80 100 120 140 160 180 146 82 58 91 48 48 59 15 7 26% 14.8% 10% 16% 9% 9% 11% 3% 1.2%
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3) Services/facilities provided to sub-broker by their broker.
12% 9% 11% 6% 3% 3% 3% 8% 13% 12% 8% 3% 1% 3% 5%
Facilities provided by broker
Different account opening schemeDepository services Different online trading software
Investment advices Risk management desk Account opening within 24 hours
Mutual fund research desk Business Development software
SMS configuration to franchisee’s clients
SERVICES AND FACILITIES
RESPONDENT
%
Different account opening scheme 124 12.01
Depository services 89 8.62
Different online trading software 111 10.75
Investment advices 61 5.91
Risk management desk 34 3.29
Account opening within 24 hours 30 2.90
Mutual fund research desk 35 3.39
Business Development software 80 7.75
SMS configuration to franchisee’s clients 138 13.37
CDSL-rights 123 11.91
Investment banking 81 7.84
Branding materials 31 3.00
online mutual fund platform 13 1.25
Customer service desk 32 3.10
HNI desk 50 4.84
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INTERPRETATION
From the 150 respondents almost 89 respondents were provided Depositary services by their broker.
Only 13 Sub-Broker were provided Online Mutual Fund Platform. That is only a 1.25% in the research.
Motilal Oswal has to focus on the various services & facilities which is available In the market & also which are having a less percentage in the survey like branding materials, Account opening within 24 hours, online Mutual funds platform etc.
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4) Main sources for getting new clients by Sub-Broker.
SOURCES
NO. RESPONDENT
%
Reference 148 64.63 Advertisement 35 15.28 Sales team 19 8.30 Others 27 11.79 TOTAL 229 100 INTERPRETATION
Main source of getting new clients for sub-broker is reference, Sub-brokers getting information about the clients through references like existing clients,
65% 15%
8%
12%
Sources for getting client
Reference Advertisement Sales team Others
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5) Percentage of client dealing in following.
% CASH FUTURE OPTION COMMOD
ITY 0 to 20 5 43 44 21 to 40 21 28 12 41 to 60 30 21 4 61 to 80 26 3 0 81 to 100 48 1 4 TOTAL 130 96 64 INTERPRETATION:
The above graph indicates that 20% of the Clients are dealing in cash 5 sub-brokers, dealing in Future option with 43 sub-broker, dealing in commodity with 44 sub.broker.
0 20 40 60 80 100 0 to 20 21 to 40 41 to 60 61 to 80 81 to 100 5 21 30 26 48 43 28 21 3 1 44 12 4 0 4
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6) The qualities that attributed for Sub-broker to be a successful sub –
broker.
QUALITIES
NO. OF
RESPONDENT
%
The brand value of the company you are associatedwith.
99 36.80
Higher ratio of successful trading calls generated. 96 35.69 A culture of properly researched Ideas coupled with
good infrastructure & client servicing.
70 26.02
Other please specify... 4 1.49
TOTAL 269 100
INTERPRETATION
36% of the respondents thinks that higher ratio of successful trading calls given to the customer is the key to become a successful broker. Motilal Oswal being best for its Equity research in the industry can approach these clients as they would like to take the research services of Motilal Oswal Securities in order to give more successful calls to their customers. And also almost 37% of the respondents thinks that‟s the brand value of the co. you are associated with are concerned.
37% 36%
26%
1%
Qualities attributes to be a successful
sub-broker
The brand value of the company you are associated with.
Higher ratio of successful trading calls generated.
A culture of properly researched Ideas coupled with good infrastructure & client servicing. Other please specify...
57
7) Factors according to Sub-Broker for having a satisfied client.
FACTORS
NO. OF RESPONDENT
%
Prompt & timely addressing of client queries 79 43.41
Best technology in place 48 26.37
Thinking ahead of time 51 28.02
Any others…. 4 2.20
TOTAL 182 100
INTERPRETATION
From the 150 respondents, almost 43.4 % of the respondents think that mostly clients are looking for prompt & timely services from them.
0 20 40 60 80 100 120 140 Prompt & timely addressing of client queries Best technology in place Thinking ahead of time Any others…. 79 48 51 4 43.4% 26.4% 28% 2.2%
58
8)
The immediate challenges for this industry & Sub-Broker’s plan
to tackle that challenges.
IMMEDIATE CHALLENGES
RESPONDENT
%
Lack of interest in the stock markets in the retail category
97 44.09
Source for fresh capital drying up from both domestic & foreign investors
60 27.27
Cut costs & wait for good times to come 58 26.36
Any other 5 2.27
TOTAL 220 100
INTERPRETATION
From the 150 respondents, the higher value is 44% into the lack of interest in the stock market in the retail category, where the other is 26 % & 28% for the both cut cost and wait for good time to come and also for the sources for the fresh capital drying up from both domestic and foreign investors respectively.
This will mostly helpful to know the problems and also the challenges that will be tackle in the share market
44%
28% 26%
2%
Immediate challenges
Lack of interest in the stock markets in the retail category Source for fresh capital drying up from both domestic & foreign investors
Cut costs & wait for good times to come
59
9)
The importance of following development criteria for
business. (Circle the one that is most suitable to your
Preference. Consider 5 as most preferred and 1 as the least
preferred)
[Note – Here consider 1 as not at all important and same as the 5 as the very important and also 3 as the neutral]
INTERPRETATION
Client satisfaction is a most important development criteria for the business. The other leading important factors or the criteria are revenue growth, client base, active ratio, etc
IMPORTANT OF BUSSINESS DEVELOPMENT NOT AT ALL IMPORTANT NOT IMPORTANT
NEUTRAL IMPORTANT VERY
IMPORTANT TOTAL Client Acquisition 5 8 26 50 61 150 Client base 5 2 10 75 58 150 Active Ratio 2 4 22 58 64 150 Client satisfaction 2 0 6 37 105 150 Revenue Growth 2 1 23 67 57 150 NOT AT ALL IMPORTANT
NOT IMPORTANT NEUTRAL IMPORTANT VERY IMPORTANT 5 8 26 50 61 5 2 10 75 58 2 4 22 58 64 2 6 37 105 2 1 23 67 57
Chart Title
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10) Please rank the following business development support as per their
importance in your business. (Rank from 1 as most imp. to 8 as least imp.)
INTERPRETATION
From the above table, it is said that the no. of the respondents are high into the centralize customer services and same as the least one is the easy acess to the senior management. The most of the respondents like the customer support, local marketing, etc.
This will let MOSL to know the requirement and support required by the sub-brokers for their business development, which in other hand will be very helpful for future correspondence with their prospects.
16.5 17.125 16.75 14.625 17.375 13.375 16.5 16.375
No. of responses
No. of responsesBusiness development Support No. of responses Rank
Centralized Advisory & Research Support 16.5 5.5 Local area Marketing & Business Support 17.125 2
Initial Training & Business migration 16.75 3.5 Easy access to senior management 14.625 8
Centralized customer services 17.375 1 Office look & feel 13.375 5.5 Seminar & Investor Meet 16.5 7 B-Plan Preparation & other support 16.375 3.5
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11) What kind of support you require which will lead to next level.
(Please give rating from 1 to 4; first priority will be ranked 1 and so
on).
Supports Require To Lead The Next Level No. Of Resp. Rank
Marketing and business development support 33 2.5
Brand value of broker 33 2.5
Successful calls given by broker 33.25 1
Back office/customer care support 32.75 4
INTERPRETATION
From the above table, MOSL can see that the red line shows the rank and the blue one is for the no. of respondents.
Here, the most of the respondents preferred the successful calls given by the broker and like wise to all.
This will helpful to know or to go to the next level of the business and increase the growth.
33 33 33.25 32.75 2.5 2.5
1
4
Marketing and business development support
Brand value of broker Successful calls given by broker
Back office/customer care support
support require to lead the next level
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12) Please rate the importance of following criteria while selecting a broker
for Franchisee… (Circle the one that is most suitable to your preference.
Consider 5 as most preferred and 1 as the least preferred)
Criteria’s for Franchisee Acquisition
NOT AT ALL IMPORTANT
NOT
IMPORTANT
NEUTRAL IMPORTANT VERY IMPORTANT
TOTAL
Growth Opportunities 0 6 16 65 63 150
Revenue Sharing ratio 0 5 16 74 55 150
Brand Name 4 5 39 37 65 150
Business Model 2 3 35 37 73 150
Research Analysis 10 11 18 47 64 150
Products & services 0 10 33 63 44 150
Initial Deposit 4 8 31 79 28 150
Growth Opportunities Revenue Sharing ratio Brand Name Business Model Research Analysis Products & services Initial Deposit 4 2 10 4 6 5 5 3 11 10 8 16 16 39 35 18 33 31 65 74 37 37 47 63 79 63 55 65 73 64 44 28
Criteria’s for Franchisee Acquisition
63
INTERPRETATION
Out of 150 respondents, 74 have given “top importance” to Revenue sharing ratio; growth opportunity and research analysis are marked as “important” by 65 and 64 respondents. Business model, product & Services and Initial deposit are being marked as neutral by 37, 63, 79 respondents respectively.
MOSL has to give high importance to the “Revenue sharing ratio” followed by the other criteria like Research Analysis and Growth Opportunity for acquiring the franchisee and for future business expansion.
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13) What kind of research analysis is provided by your broker?
INTERPRETATION
The majority of the respondent is in the daily email through. The least one is the daily & weekly physical reports.
It helps to know the current situation and how to boost up the business.
Daily Weekly Monthly Quarterly Annually
0 0 7 5 21 89 13 4 0 0 15 24 11 0 0
Providing research reports
Physical Email Uploaded on Website
TIME Physical Email Uploaded on Website Daily 0 89 15 Weekly 0 13 24 Monthly 7 4 11 Quarterly 5 0 0 Annually 21 0 0
