INTRODUCTION TO THE INDUSTRY

Introduction:

Investment is a term with several closely-related meaning in finance and economics .In general terms it refers to use money in the hope of making more money. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or appreciate and be sold at a higher price.

Why to invest:-

These are the following reasons, why a person should invest:-

• Inflation is constantly increasing the cost of goods and services and eating into the value of your income and wealth. You need to save money and invest it well so that the value of every rupee is augmented.

• Higher life-expectancy means people live longer and hence, need more money to maintain their living standards.

• Investing selectively allows you to enjoy tax benefits.• By investing wisely you can improve your standard of

living and create wealth for the future.

When to invest:-It's never too late or too early to start investing. The 4 keys that could guide an investor regarding when to invest are:-

Start investing early- Start early and retire rich. Invest whatever you can today and move steadily towards a secure tomorrow.

Invest regularly- Invest regularly and methodically and let the magic of compounding work for you.

Never time the market- Be a smart investor. Always invest in time but never try to time the market. Timing the market is mastered by none and is beyond one's control.

Be patient- For long-term wealth creation, an investor need to be patient. The longer the investment horizon, the lesser is the risk and greater are the returns.

Investment and BankingBanking industry has witnessed a tremendous change in terms of its service and products. Earlier banks only safeguard money and valuables and provide loans, credit, and payment services, such as checking accounts, money orders, and cashier’s checks. But with the passage of the Financial Modernization Act in 1999, banks also may offer investment and insurance products, which they were once prohibited from selling. As a variety of models for cooperation and integration between the financial services industries have emerged, some of the traditional distinctions between banks, insurance companies, and securities firms have diminished. In spite of these changes, banks continue to maintain and perform their primary role in the financial system—accepting deposits and lending funds from these deposits. Now banks are offering a variety of investment services and products, which can be easily, avail by investors. Private sector banks in India have emerged with very innovative investment services to its customers, which are according to their financial needs and risk appetite.

INTRODUCTION TO THE ORGANIZATION

Kotak Mahindra GroupThe Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance Limited. This company was promoted by Uday Kotak, Sidney A. A. Pinto and Kotak & Company. Industrialists Harish Mahindra and Anand Mahindra took a stake in 1986, and that's when the company changed its name to Kotak Mahindra Finance Limited.Kotak Mahindra is one of India's leading financial organizations, offering a wide range of financial services that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the diverse financial needs of individuals and corporates.The group has a net worth of over Rs. 7,100 crore and has a distribution network of branches, franchisees, representative offices and satellite offices across cities and towns in India and offices in New York, London, San Francisco, Dubai, Mauritius and Singapore. The Group services around 6.5 million customer accounts.

The journey so far

KEY COMPANIES OF KOTAK GROUP

Kotak Mahindra Bank Kotak Mahindra Capital Company Kotak Securities Kotak Mahindra Prime Kotak Mahindra Asset Management Company Kotak Mahindra Old Mutual Life Insurance

Limited Kotak's International Business

About Kotak Mahindra Bank

The Kotak Mahindra Group's flagship company, Kotak Mahindra Finance Ltd which was established in 1985, was converted into a bank- Kotak Mahindra Bank Ltd in March 2003 becoming the first Indian company to convert into a Bank. Its banking operations offer a central platform for customer relationships across the group's various businesses. The bank has presence in Commercial Vehicles, Retail Finance, Corporate Banking, Treasury and Housing Finance.

Kotak Mahindra Bank addresses the entire spectrum of financial needs for individuals and corporates. KMBL have the products, the experience, the infrastructure and most importantly the commitment to deliver pragmatic, end-to-end solutions that really work.

SERVICES PROVIDED BY KOTAK MAHINDRA BANK

Deposits account Loans Savings Accounts Current Accounts Term Deposits Safe deposits lockers Investment services Cards Convenience banking NRI Service

INVESTMENT SERVICES PROVIDED BY KOTAK MAHINDRA BANK

DEMAT -

Key Features Efficient depository services that allow the

investor to hold his shares in convenient "demat" formats.

Leverage opportunities in the stock-market when investor can spot them.

MUTUAL FUNDS -

Key Features

Assistance at every step of the investment process.

An experienced research team to analyze and research the Mutual Funds available in the market Portfolio assistance.

INSURANCE -

Key Features

Carefully selected insurance policies to suit investor’s needs.

Experts to help in analyzing investor’s insurance needs and develop the solution that best works for him.

KOTAK GOLD ETERNITY -

Key Features

24 carat pure gold coins and bars carrying a 99.99% Assay Certification

Unique number on every certicard, with records maintained in Switzerland

The above graph shows the asset under management of mutual funds

Growth in the investment services of KMBL- Bank Deposits (Term deposits and CASA)-

Above graph shows the growth in the CASA and term deposits of Kotak Mahindra bank in last 5 years. CASA deposits have increased from Rs. 199 crore in 2004 to Rs.4251 crore in 2008 and term deposits as well grow from Rs.1,810 crore in 2004 to Rs.11,754 crore in 2008.The CAGR(Compound Annual Growth Rate) of CASA deposits is 115% and CAGR of term deposits is 59.6%. This shows remarkable growth in the bank deposits of Kotak Mahindra bank.

Insurance Premium –

Analysis of the above graph shows that insurance premium of KMBL has increased from Rs.151 crore in 2004 to Rs.1662 crore in 2008.

The CAGR (Compound Annual Growth Rate) of insurance premium is 82.14%. These represented that there is tremendous growth in the insurance business of Kotak Mahindra Bank in last 5 years.

Mutual Funds-

Asset under management of KMBL has increased substantially in last 5 years. Equity assets have increased from Rs.12.9 bn in FY05 to Rs.27.3 bn in FY09. Debt assets have increased from Rs.53.6 bn in FY05 to Rs.131.8 bn in FY 09.

There is decline shown in the equity assets in last financial year, mainly due market turmoil.

Broking Income–

The above graph shows total income of KMBL through broking business. There is increase in broking income from Rs.3297 mn in FY 05 to Rs. 13,300 mn

in FY 08. After FY 08, in FY 09 broking income has declined. The major reason behind this decline is less volume of trading in securities because of volatile market condition.