Chapter: 1Chapter: 1
Introduction of the studyIntroduction of the study
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Introduction of the study
INVESTMENTS
The Meaning of 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. This is called Investment.
Reason behind investment:
One needs to invest to:
Earn return on your idle resources
Generate a specified sum of money for a specific goal in life
Make a provision for an uncertain future
One of the important reasons why one needs to invest wisely is to meet the cost of
Inflation.
Remember to look at an investment's 'real' rate of return, which is the return after
inflation. The aim of investments should be to provide a return above the inflation
rate to ensure that the investment does not decrease in value.
Investment is never an easy process. However, a sound understanding of some
basic concepts make the process of investment decision-making much easier
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and the experience much more enjoyable. But investment needs some planning
to do, analysis of some basic needs. Here are some of the basic steps for the
investment.
1) Identify your financial needs and goals.
2) Your ability to take the risk.
3) Estimate your required rate of return.
4) To meet the cost of inflation.
Three golden rules for investment
1) Invest early
2) Invest regularly
3) Invest for long term.
But due to the lack of awareness towards the various financial products peoples
are losing the opportunity to earn on their investment. Even they don’t know how
the value of money is depreciating due to the various factors like inflation.
Interest rates etc.
RETURN ON INVESTMENT
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Return on Investment (ROI) analysis is one of several approaches to building a financial business case. The term means that decision makers evaluate the investment by comparing the magnitude and timing of expected gains to the investment costs.
TYPES OF INVESTMENT:-
There are basically three types of investments from which the investors can choose.
The three kinds of investment have their own risk and return profile and investor will
decide to invest taking into account his own risk appetite. The main types of
investments are: -
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Economic investments:-
These investments refer to the net addition to the capital stock of the society. The
capital stock of the society refers to the investments made in plant, building, land and
machinery which are used for the further production of the goods. This type of
investments are very important for the development of the economy because if the
investment are not made in the plant and machinery the industrial production will come
down and which will bring down the overall growth of the economy.
Financial Investments:-
This type of investments refers to the investments made in the marketable securities which are of tradable nature. It includes the shares, debentures, bonds and units of the mutual funds and any other securities which is covered under the ambit of the Securities Contract Regulations Act definition of the word security. The investments made in the capital market instruments are of vital important for the country economic growth as the stock market index is called as the barometer of the economy.
General Investments:-
These investments refer to the investments made by the common investor in his own
small assets like the television, car, house, motor cycle. These types of investments are
termed as the household investments. Such types of investment are important for the
domestic economy of the country. When the demand in the domestic economy boost
the over all productions and the manufacturing in the industrial sectors also goes up and
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this causes rise in the employment activity and thus boost up the GDP growth rate of
the country. The organizations like the Central Statistical Organization (CSO) regularly
takes the study of the investments made in the household sector which shows that the
level of consumptions in the domestic markets.
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CHARACTERISICS OF INVESTMENT
Certain features characterize all investments. The following are the main characteristics
features if investments: -
1.Return: -
All investments are characterized by the expectation of a return. In fact, investments are
made with the primary objective of deriving a return. The return may be received in the
form of yield plus capital appreciation. The difference between the sale price & the
purchase price is capital appreciation. The dividend or interest received from the
investment is the yield. Different types of investments promise different rates of return.
The return from an investment depends upon the nature of investment, the maturity
period & a host of other factors.
2.Risk: -
Risk is inherent in any investment. The risk may relate to loss of capital, delay in
repayment of capital, nonpayment of interest, or variability of returns. While some
investments like government securities & bank deposits are almost risk less, others are
more risky. The risk of an investment depends on the following factors.
The longer the maturity period, the longer is the risk.
The lower the credit worthiness of the borrower, the higher is the risk .
The risk varies with the nature of investment. Investments in ownership securities like
equity share carry higher risk compared to investments in debt instrument like
debentures & bonds.
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3. Safety: -
The safety of an investment implies the certainty of return of capital without loss of
money or time. Safety is another features which an investors desire for his investments.
Every investor expects to get back his capital on maturity without loss & without delay.
4. Liquidity: -
An investment, which is easily saleable, or marketable without loss of money & without
loss of time is said to possess liquidity. Some investments like company deposits, bank
deposits, P.O. deposits, NSC, NSS etc. are not marketable. Some investment
instrument like preference shares & debentures are marketable, but there are no buyers
in many cases & hence their liquidity is negligible. Equity shares of companies listed on
stock exchanges are easily marketable through the stock exchanges.
An investor generally prefers liquidity for his investment, safety of his funds, a good
return with minimum risk or minimization of risk & maximization of return.
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IMPORTANCE
In the current situation, investment is becomes necessary for everyone & it is
important & useful in the following ways:
1. Retirement planning: -
Investment decision has become significant as people retire between the ages of 55 &
60. Also, the trend shows longer life expectancy. The earning from employment should,
therefore, be calculated in such a manner that a portion should be put away as a
savings. Savings by themselves do not increase wealth; these must be invested in such
a way that the principal & income will be adequate for a greater number of retirement
years. Increase in working population, proper planning for life span & longevity have
ensured the need for balanced investments.
2. Increasing rates of taxation: -
Taxation is one of the crucial factors in any country, which introduce an element of
compulsion, in a person’s saving. In the form investments, there are various forms of
saving outlets in our country, which help in bringing down the tax level by offering
deductions in personal income.
For examples: -
Unit linked insurance plan,
Life insurance,
National saving certificates,
Development bonds,
Post office cumulative deposit schemes etc.
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3. Rates of interest: -
It is also an important aspect for sound investment plan. It varies between investment &
another. This may vary between risky & safe investment, they may also differ due
different benefits schemes offered by the investments. These aspects must be
considered before actually investing. The investor has to include in his portfolio several
kinds of investments stability of interest is as important as receiving high rate of interest.
4. Inflation: -
Since the last decade, now a day’s inflation becomes a continuous problem. In these
years of rising prices, several problems are associated coupled with a falling standard of
living. Before funds are invested, erosion of the resource will have to be carefully
considered in order to make the right choice of investments. The investor will try &
search outlets, which gives him a high rate of return in form of interest to cover any
decrease due to inflation. He will also have to judge whether the interest or return will be
continuous or there is a likelihood of irregularity. Coupled with high rate of interest, he
will have to find an outlet, which will ensure safety of principal. Beside high rate of
interest & safety of principal an investor also has to always bear in mind the taxation
angle, the interest earned through investment should not unduly increase his taxation
burden otherwise; the benefit derived from interest will be compensated by an increase
in taxation.
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5. Income: -
For increasing in employment opportunities in India., investment decisions have
assumed importance. After independence with the stage of development in the country
a number of organization & services came into being.
For example: -
The Indian administrative services,
Banking recruitment services,
Expansion in private corporate sector,
Public sector enterprises,
Establishing of financial institutions, tourism, hotels, and education.
More avenues for investment have led to the ability & willingness of working
people to save & invest their funds.
6. Investment channels: -
The growth & development of country leading to greater economic activity has led to the
introduction of a vast array of investment outlays. Apart from putting aside saving in
savings banks where interest is low, investor have the choice of a variety of
instruments. The question to reason out is which is the most suitable channel? Which
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media will give a balanced growth & stability of return? The investor in his choice of
investment will give a balanced growth & stability of return? The investor in his choice of
investment will have try & achieve a proper mix between high rates of return to reap the
benefits of both.
For example: -
Fixed deposit in corporate sector
Unit trust schemes.
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INVESTMENTS AVENUES:-
There are various investments avenues provided by a country to its people depending
upon the development of the country itself. The developed countries like the USA and
the Japan provide variety of investments as compared to our country. In India before the
post liberalization era there were limited investments avenues available to the people in
which they could invest. With the opening up of the economy the number of
investments avenues have also increased and the quality of the investments have also
improved due to the use of the professional activity of the players involved in this
segment. Today investment is no longer a process of trial and error and it has become a
systematized process, which involves the use of the professional investment solution
provider to play a greater role in the investment process.
Earlier the investments were made without any analysis as the complexity involved the
investment process were not there and also there was no availability of variety of
instruments. But today as the number of investment options have increased and with
the variety of investments options available the investor has to take decision according
to his own risk and return analysis.
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PORTFOLIO
Meaning of portfolio:-
Portfolio
A combination of securities with different risk & return characteristics will constitute the
portfolio of the investor. Thus, a portfolio is the combination of various assets and/or
instruments of investments. The combination may have different features of risk &
return, separate from those of the components. The portfolio is also built up out of the
wealth or income of the investor over a period of time, with a view to suit his risk and
return preference to that of the portfolio that he holds. The portfolio analysis of the risk
and return characteristics of individual securities in the portfolio and changes that may
take place in combination with other securities due to interaction among themselves and
impact of each one of them on others.
An investor considering investments in securities is faced with the problem of choosing
from among a large number of securities. His choice depends upon the risk and return
characteristics of individual securities. He would attempt to choose the most desirable
securities and like to allocate is funds over this group of securities. Again he is faced
with the problem of deciding which securities to hold and how much to invest in each.
The investor faces an infinite number of possible portfolios or groups of securities. The
risk and return characteristics of portfolio differ from those of individual securities
combining to form a portfolio. The investor tries to choose the optimal portfolio taking in
to consideration the risk return characteristics of all possible portfolios.
As the economy and the financial environment keep changing the risk return
characteristics of individual securities as well as portfolios also change. This calls for
periodical review and revision of investment portfolios of investors. An investor invests
his funds in a portfolio expecting to get a good return consistent with the risk that he has
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to bear. The return realized from the portfolio has to be measured and the performance
of the portfolio has to be evaluated.
It is evident that rational investment activity involves creation of an investment portfolio.
Portfolio management comprises all the processes involved in the creation and
maintenance of an investment portfolio. It deals specifically with the security analysis,
portfolio analysis, portfolio selection, portfolio revision and portfolio evaluation. Portfolio
management makes use of analytical techniques of analysis and conceptual theories
regarding rational allocation of funds. Portfolio management is a complex process which
tries to make investment activity more rewarding and less risky.
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Before designing a portfolio one will have to know the intention of the investor or the
returns that the investor is expecting from his investment. This will help in adjusting
the amount of risk. This becomes an important point from the point of view of the
portfolio designer because if the investor will be ready to take more risk at the same
time he will also get more returns.
From the above discussion we can conclude that the investors can be of the
following three types:
1. Investors willing to take minimum risk and at the same time are also expecting
minimum returns.
2. Investors willing to take moderate risk and at the same time are also expecting
moderate returns.
3. Investors willing to take maximum risk and at the same time are also expecting
maximum returns.
PORTFOLIO – AGE RELATIONSHIP
Your age will help you determine what a good mix is / portfolio is
Age Portfoliobelow 30 80% in stocks or mutual funds
10% in cash10% in fixed income
30 t0 40 70% in stocks or mutual funds
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PORTFOLIO DESIGN
10% in cash20% in fixed income
40 to 50 60% in stocks or mutual funds 10% in cash 30% in fixed income
50 to 60 50% in stocks or mutual funds10% in cash40% in fixed income
above 60 40% in stocks or mutual funds 10% in cash 50% in fixed income
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Chapter-3
Research methodology
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RESEARCH METHODOLOGY
Research methodology is the way to systematically solve the research problem.
Research in common refers to a search of knowledge. In fact research is an art of
scientific investigation. According to the advanced learning dictionary, “research is a
careful investigation of inquiry especially for finding”. In it we study the various steps
that are generally adopted by the researcher in study of his research problem along with
logic behind them. It is necessary for the researcher to know the research method and
techniques.
So, research, methodologies adopted by the researchers in this project are as follows:
AREA OF RESEARCH
I have taken Raipur city as a whole as my area of research within in which I have filled
my questionnaires from the peoples of Raipur city including the customers of Kotak
Mahindra Bank ltd.
SAMPLE SIZE:
Sample size is the total number of respondents selected. In my research
work I have taken a sample size of 50 respondents.
SOURCES OF DATA
For assessing the behavior pattern of the customers towards Kotak as an investment
gateway, I have collected the data from both the sources i.e. primary sources and
secondary source.
Primary Source
For this research, I have prepared a questionnaire for collecting the data. I distributed
the questionnaire to the selected investors. On the basis of their feedback, I have done
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the analysis for my report, the items included in the questionnaire where investors
needs of investments and improvement in present system.
Secondary Source
Various books, broachers, company’s website, project reports etc where used as
secondary source.
QUESTIONNAIRE DESIGN
Questionnaire design is a most common instrument. A researcher should avoid bias
and develops a device, which will facilitate effective communication. The questionnaire
considers all these factors can secure relevant facts or opinion from informed and
interested responded. I designed a questionnaire contained like this and conducted the
sample survey. The questionnaire contains fourteen questions helped me in collecting
the relevant data for my project while preparing the questions. I almost gave attention to
the number of questions, types, wording and sequence of question. The questionnaire
contains close-ended question and proper care was taken to minimize ambiguity. In
order to get the information through the questionnaire, I adopted personal interview also
and it helped both the purpose of getting the information, which was mentioned, in the
questionnaire and some vital additional information, which employees expressed while
talking me.
SAMPLING METHOD
The researcher adopted the convenient sampling method. In this method
the sampling unit is chosen primarily on the basis of convenience to the investigators. In
this type of sampling the researcher selects the item for the sample deliberately; his
choice concerning the items remains supreme. In other words, under this sampling
method the organizers of the enquiry purposively choose the particular unit of the
universe for constituting a sample on the basis that the small mass that they select out
of huge ones will be typical or representative of the whole.
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STATISTICAL TECHNIQUES:
Percentage method technique of central tendency was used by researcher in the
analysis of the data in this research. Percentage refers to a special kind of ratio.
Percentage is used in making comparison between two or more series of data.
Percentages are used to describe relationships. Such a measure is considered as the
most representative figure for the entire mass of data.
EXECUTION OF PROJECT:
It is very important step in the research process. According to it findings depends on
how systematically the study has been cased out in the time so that it can make some
sense when required. I have executed the project after prior discussion with the guide
and structure in following steps.
1. preparation of questionnaire
2. Visiting the customers and asking them about the service they all
availing from Kotak Mahindra ltd. Try to find out the satisfaction level
with the existing customers.
TOOLS AND TECHNIQUES OF ANALYSIS
PIECHART:
Pie chart is an alternative to a component bar diagrams, we can represent
various components of a phenomenon by participating a circle.
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BAR DIAGRAM:
Simple Bar diagram the vertical or horizontal to the value of the item, are
constructed. Bar diagrams are particulars suitable for representing individual time series
or partial devices.
.
PERCENTAGE:
It is used to get the percentage value of distributed data
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Chapter-4
Industry profile
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Chapter-5
Company profile
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COMPANY PROFILE
The Kotak Mahindra Group
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 corporate.
The group has a net worth of over Rs. 6,799 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 6.4 million customer accounts.
Our Corporate Identity
Slogan or Punch line
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Think investment, Think Kotak.
SEGMENTS IN WHICH KOTAK MAHINDRA DEALS
Banking Services
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. It’s banking
operations offers a central platform for customer relationships across the group’s
various businesses. The bank has a presence in the Commercial Vehicles, Retail
Finance, Corporate Banking, Treasury and Housing Finance.
Kotak Mahindra Capital Company
Kotak Mahindra Capital Company Limited (KMCC) is India's premier Investment Bank.
KMCC's core business areas include Equity Issuances, Mergers & Acquisitions,
Structured Finance and Advisory Services.
Kotak Securities
Kotak Securities Ltd., is one of India's largest brokerage and securities distribution
house in India. Over the years Kotak Securities has been one of the leading investment
broking houses catering to the needs of both institutional and non-institutional investor
categories with presence all over the country through franchisees and co-coordinators.
Kotak Securities Ltd. offers online and offline services based on well-researched
expertise and financial products to the non-institutional investors.
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Kotak Mahindra Prime
Kotak Mahindra Prime Limited (KMP) (formerly known as Kotak Mahindra Primus
Limited) has been formed with the objective of financing the retail and wholesale trade
of passenger and multi utility vehicles in India. KMP offers customers retail finance for
both new as well as used cars and wholesale finance to dealers in the automobile
trade. KMP continues to be among the leading car finance companies in India.
Kotak Mahindra Asset Management Company
Kotak Mahindra Asset Management Company Kotak Mahindra Asset Management
Company (KMAMC), a subsidiary of Kotak Mahindra Bank, is the asset manager for
Kotak Mahindra Mutual Fund (KMMF). KMMF manages funds in excess of Rs 25,628
crore and offers schemes catering to investors with varying risk-return profiles. It was
the first fund house in the country to launch a dedicated gilt scheme investing only in
government securities.
Kotak Mahindra Old Mutual Life Insurance Limited
Kotak Mahindra Old Mutual Life Insurance Limited, is a joint venture between Kotak
Mahindra Bank Ltd. and Old Mutual plc. Kotak Life Insurance helps customers to
take important financial decisions at every stage in life by offering them a wide range of
innovative life insurance products, to make them financially independent.
Kotak‘s International Business
With a presence outside India since 1994, the international subsidiaries of Kotak
Mahindra Bank Ltd. operating through offices in London, New York, Dubai, San
Francisco, Singapore and Mauritius specialize in providing asset management services
to specialist overseas investors seeking to invest into India. The offerings are
differentiated India investment solutions that span all major asset classes including
listed equity, private equity and real estate. The subsidiaries also lead manage and
underwrite international issuances of securities. With its commendable track record,
large presence on the ground and a team of dedicated staff in India, Kotak’s
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international arm is suitably positioned for managing assets in the Indian Capital
markets.
MILESTONE
1986 Kotak Mahindra Finance Limited starts the activity of Bill Discounting
1987 Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market
1990 The Auto Finance division is started
1991 The Investment Banking Division is started. Takes over FICOM, one of India’s
largest financial retail marketing networks
1992 Enters the Funds Syndication sector
1995 Brokerage and Distribution businesses incorporated into a separate company -
Kotak Securities. Investment Banking division incorporated into a separate
company - Kotak Mahindra Capital Company
1996 The Auto Finance Business is hived off into a separate company - Kotak
Mahindra Prime Limited (formerly known as Kotak Mahindra Primus Limited).
Kotak Mahindra takes a significant stake in Ford Credit Kotak Mahindra Limited,
for financing Ford vehicles. The launch of Matrix Information Services Limited
marks the Group’s entry into information distribution.
1998 Enters the mutual fund market with the launch of Kotak Mahindra Asset
Management Company.
2000 Kotak Mahindra ties up with Old Mutual plc. for the Life Insurance business.
Kotak Securities launches its on-line broking site (now
www.kotaksecurities.com). Commencement of private equity activity through
setting up of Kotak Mahindra Venture Capital Fund.
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2001 Matrix sold to Friday Corporation
Launches Insurance Services
2003 Kotak Mahindra Finance Ltd. converts to a commercial bank – the first Indian
company to do so.
2004 Launches India Growth Fund, a private equity fund.
2005 Kotak Group realigns joint venture in Ford Credit; Buys Kotak Mahindra Prime
(formerly known as Kotak Mahindra Primus Limited) and sells Ford credit Kotak
Mahindra.
Launches a real estate fund
2006 Bought the 25% stake held by Goldman Sachs in Kotak Mahindra CapitalCompany and Kotak Securities
Graphical Representation of Journey So Far
The journey so far
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Group Structure
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* Includes direct and indirect holdings
Group Management
Mr. Uday Kotak (Executive vice chairman & Managing Director).
Mr. Shivaji Dam.Mr. C. Jayaram.Mr. Dipak Gupta.
Board of Directors
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Dr. Shankar Acharya (chairman)
Mr. Uday Kotak (executive vice chairman and Managing Director)
Mr. Anand Mahindra
Mr. K.M. Gherda
Mr. Cyril Shroff
Mr. Pradeep Kotak
Mr. Shivaji Dam
Mr. C. Jayaram (Executive Director)
Mr. Dipak Gupta (Executive Director)
Ms. Bina Chandarana (Secretary & Senior Vice President)
Awards
2009
Kotak Mahindra Bank was awarded Hewitt Best Employers in India 2009
Kotak Mahindra Bank was ranked in the top 5 of companies with “Best Corporate
Governance Practices” in Asia/Pacific - IR Global Rankings 2009
Kotak Mahindra Bank and Oracle Siebel won the “Best CRM/Applications Project
Award 2009” at the IT Implementation Awards 2009 by The Asian Banker
Kotak Mahindra was adjudged India’s overall the “Best Private Banking Services”
award by Euromoney 2009
Kotak Credit Cards- Kotak Royal Signature’s card is chosen “Product of the
Year” by Nielsen who surveyed 40,000 consumers.
Kotak Life Insurance plans were rated amongst the best in the industry for a
second year in a row in the annual ULIP Ranking carried out by Outlook Money.
o Outlook Money awarded the 1st Rank to Kotak Platinum Advantage Plan
in Type II ULIPs category
o Outlook Money awarded 4th Rank to Kotak Long Life Wealth Plus plans in
the Type I ULIPs category, concluding that “Kotak Life has a product
portfolio which delivers what customers want.”
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Kotak Life Insurance plans were rated amongst the best in the industry for a
second year in a row in the annual ULIP Ranking carried out by Outlook Money.
Kotak Securities- Best Brokerage Firm in India - Asiamoney, 2008
Kotak Securities- Selected “Business Superbrand India 2008
Kotak Securities - “India Equity House of the Year 2008” award from IFR Asia
Kotak Securities - “Best Equity House in India” by FinanceAsia in 2008
Kotak Securities - “Best Equity House in India” by Asiamoney in 2008
Kotak Securities - “Best Brokerage and Best Analyst (Sanjeev Prasad) in India”
in the Asiamoney 2008 Brokers Poll
Kotak Investment Banking was awarded the “Best Domestic Investment Bank
2008” by Triple A Asset Asian Awards
Kotak Investment Banking was ranked “Best Investment Bank in India” by Global
Finance in 2008
Kotak Mutual Fund:
o Kotak Liquid – Regular Plan has been ranked as a Seven Star Fund in the
category of “Open-Ended Liquid” schemes for its 1 year performance till
December 31, 2008- ICRA Online Limited
o Kotak Flexi Debt Fund has been ranked as a Five Star Fund in the
category of “Open-Ended Liquid Plus” schemes for its 1 year performance
till 31 December 2008 - ICRA Online Limited
o Kotak Flexi Debt Fund has been ranked as a Five Star Fund in the
category of “Open-Ended Liquid Plus” schemes for it’s 3 year performance
till 31 December 2008 - ICRA Online Limited
o Kotak 30 has been ranked as a Five Star Fund in the category of “Open
Diversified Equity- Defensive” for its 3 year performance- ICRA Online
Limited. The Five Star category comprises of funds in the top 10 percentile
in performance.
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Kotak Investment Banking was named “Best Investment Bank” and “Best Equity
House in India” by FinanceAsia Best Bank Awards 2008 and was named “Best
Domestic Equity House” by Asia Money Best Bank Awards 2008.
Awarded the Best Domestic Investment Bank and the Best Equity House in The
Asset Triple A Country Awards for the period October 1, 2007 to September 30,
2008.
2008
Kotak Investment Bank was awarded the “Best Investment Bank” in the domestic
category in India by Finance Asia for the second year in a row.
Kotak Mutual Fund-Kotak Bond Short Term won ICRA Mutual Fund Gold Award
in the short term Debt category for 1 year & 3 year – 2008
Kotak Securities was awarded the leading Equity house in India for 2007 by
Thomson Extel Survey Awards for Asia Pacific.
Kotak Mahindra Bank was awarded as Best Security Strategist by Microsoft India
and Best IT Implementation for Information security by PCQUEST
Kotak Securities- Best Brokerage Firm in India - Asiamoney, 2007
Kotak Bank emerged in top 3 in 23 categories, including No.1 in 11 categories in
the Euromoney Private Banking Poll 2008.
Kotak Mahindra Bank IT team got 4 awards (including Best IT Team of the year
for the 3rd consecutive year, at the annual BANKING Technology Awards 2008.
Kotak Investment Banking for CY2007 was ranked no 1 by India Advisory
Partners for Mergers & Acquisitions
Kotak Mutual Fund was adjudged as the’ best debt fund house’ and was
awarded ‘wealth creator award’ at Outlook Money NDTV Profit 2007 awards
Kotak Securities was awarded the Avaya Global Connect Customer
Responsiveness Awards in Financial Service Sector, 2007
Kotak Securities was awarded Best Performing Equity Broker in India - CNBC TV
18" – Optimix Financial Advisory Awards, 2008
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Kotak Mahindra Bank was in the Top 5 for Corporate Governance amongst
companies by technical criteria by IR Global Rankings 2008 for the Asia Pacific /
Africa region.
Kotak’s Investor Relation website was adjudged the most voted company in Asia
Pacific / Africa by IR Global Rankings 2008 in five categories; Corporate
Governance Practices, Financial Disclosure Procedures, IR Team, IR Program
and IR Website.
Housing Finance Division of the Bank won the award for “Best in Customer
Information and Responsiveness” among all HFI’s and Banks in the award
hosted by Maharashtra Chamber of Housing Industry (MCHI).
Kotak Investment Banking was ranked No. 1 for FY08 by Prime Database for two
league tables (a) India Domestic IPOs, (b) Qualified Institutional Placements
including Government Divestments.
Kotak Mutual Fund’s three equity schemes (Kotak 30, Kotak Opportunities and
Kotak Balance) have been ranked CPR 1 by CRISIL for Q4 FY08.
2007
Kotak Mahindra Bank IT team got 6 awards (including Best IT Team of the year
for the 2nd consecutive year, Best overall winner), organized by IBA in
recognition of achievements in Banking Technologies.
Kotak Securities was ranked The Most Customer Responsive Company for 2007
(Category - Financial Services) by Avaya Globalconnect
Adjudged the “best debt fund house” and was awarded “wealth creator award” at
Outlook Money NDTV Profit 2007 awards
Emerged in top 3 in 23 categories, including No. 1 in 11 categories in the
Euromoney Private Banking Survey Poll for 2008
Topped the Asiamoney Brokers Poll as the Best Brokerage firm in India in 2007
Bank was awarded as Best Security Strategist by Microsoft India and Best IT
Implementation for Information security by PCQUEST
Awarded the leading Equity house in India for 2007 by Thomson Extel Survey
Awards for Asia Pacific
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Awarded the 10th Best Employer in the recently conducted Hewitt’s Best
Employers in India 2007 Study
Best Investment Bank in India by Finance Asia
Most Popular Investor Relation Website for the Asia/Pacific Region conducted by
IR Global Rankings
Emerged winner in 16 categories in the Euromoney Private Banking Poll 2007,
including the Best local Private Bank
2006
Emerged in top 2 in 6 categories, including No 1 in 3 categories and "IT Team of
the Year" award at the annual Banking Technology Awards 2007
Runner’s up in the “Best Payments Initiative” category at the annual Banking
Technology Awards 2006
Kotak Securities was ranked The Most Customer Responsive Company for 2006
(Category - Financial Services) by Avaya Globalconnect
Awarded the Best Domestic Investment Bank and the Best Equity House in The
Asset Triple A Country Awards
Awarded Voice of Customers Award for the Best Passenger Vehicle Finance
Company in India in 2006 by Frost & Sullivan
Winner in 33 categories in the Asiamoney Private Banking Poll 2006 including
the Best Private Bank award in Southern Asia
Ranked no. 1 in six categories in the Annual Euromoney Private Banking Survey
Poll for 2006 for India
Best Investment Bank in India by Finance Asia
Ranked # 1 in the league table for Book runner/ Lead Manager in public equity
offerings in terms of the value of transactions completed during fiscal 2006
according to Prime Database
Best Broker in India by Finance Asia
Topped the Asiamoney 2006 Brokers Poll as the Best Local Broker
Adjudged the best Mutual Fund House in the NDTV Business Leadership Award
2006
IIMT Page 36
Best Bond Fund Group over Three Years by Lipper Fund Awards India
Ranked the best debt fund over 5 years by Lipper for the Kotak Bond Regular
Plan
Ranked ICRA-MFR1 and was the recipient of the Silver Award by ICRA for the
'Kotak Bond Regular Plan'
2005
Ranked as the top mergers & acquisitions advisor in India in terms of the value of
mergers & acquisitions deals announced from January to December 2005,
according to Bloomberg
Topped the India Advisory Partners Indata League table in terms of the value of
deals announced for the calendar year 2005
Ranked # 1 in the league table for Book runner/ Lead Manager in public equity
offerings in terms of the value of transactions completed during fiscal 2005
according to Prime Database
Best Broker in India by Finance Asia
Best Equity House in India by Euromoney
2004
Best Investment Bank in India by Finance Asia
Ranked # 1 in the league table for Book runner/ Lead Manager in public equity
offerings in terms of the value of transactions completed during fiscal 2004
according to Prime Database
Best Investment Bank in India by Global Finance
India's Best Equity House in India by Finance Asia
Best Equity House in India by Euromoney
Best Equity House in India by Asiamoney
Best India Equity House by IFR
2003
IIMT Page 37
Best Investment Bank in India by Finance Asia
Ranked # 1 in the league table for Book runner/ Lead Manager in public equity
offerings in terms of the value of transactions completed during fiscal 2003,
according to Prime Database
Best Equity House in India by Euromoney
Best Equity House in India by Asiamoney
IIMT Page 38
ABOUT “KOTAK MAHINDRA BANK LTD.”
The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance
Limited. Uday Kotak, Sidney A. A. Pinto and Kotak & Company promoted this company.
Industrialists Harish Mahindra and Anand Mahindra took a stake in 1986, and that is
when the company changed its name to Kotak Mahindra Finance Limited. In February
2003, Kotak Mahindra Finance Ltd, the group's flagship company was given the license
to launch its banking business. Kotak Mahindra Finance Ltd. is the first finance
company in Indian banking history to convert to a bank. Since then it has been a steady
and confident journey to growth and success.
Recently, Kotak Mahindra Bank Ltd and HDFC Bank have signed a Memorandum of
Understanding to share their ATM network. This agreement will give customers of the
two banks access to over 1400 ATMs across the country. The bank has the presence of
commercial vehicles, retail finance, corporate banking, treasury and housing finance.
IIMT Page 39
KOTAK MAHINDRA BANK LIMITED (CONSOLIDATED)
Registered Office: 36-38A, Nariman Bhavan, 227, Nariman Point, Mumbai 400 021
UNAUDITED FINANCIAL RESULTS FOR THE PERIOD APRIL TO JUNE, 2009
Rs lakhs
Sr No
ParticularsQuarter Ended
Year Ended
June-09 (Unaudited)
June-08 (Unaudited)
March-09 (Audited)
1 Interest earned (a+b+c+d) 106,273.13 104,190.41 436,656.34
(a) Interest/discount on advances/bills 83,036.39 81,827.86 350,545.90
(b) Income on investments 22,168.48 19,040.74 75,957.73
(c) Interest on balances with RBI & other banks 221.32 1,944.09 5,621.68
(d) Others 846.94 1,377.72 4,531.03
2 Other income (a+b) 128,252.36 44,534.31 288,261.42
(a) Profit/(Loss) on sale of investments including revaluation (insurance business)
41,623.36 (25,547.04) (51,812.66)
(b) Other income (see Notes 1 and 5) 86,629.00 70,081.35 340,074.08
3 Total income (1+2) 234,525.49 148,724.72 724,917.76
4 Interest expended 43,767.43 46,582.56 199,239.47
5 Operating expenses (a+b+c) 133,721.04 74,755.49 391,078.64
(a) Payments to and provisions for employees 28,266.26 31,868.02 119,251.05
(b) Policy holders’ reserves, surrender expense and claims
76,070.89 4,457.54 113,946.90
(c) Other operating expenses (see Note 2 and 5) 29,383.89 38,429.93 157,880.69
6Total expenditure (4+5) (excluding provisions and
contingencies)177,488.47 121,338.05 590,318.11
7Operating Profit before provisions and
contingencies (3-6)57,037.02 27,386.67 134,599.65
8Provisions (other than tax) and contingencies (see Note
3)19,079.76 4,124.71 32,979.46
9 Exceptional items - - -
10 Profit from ordinary activities before tax (7-8-9) 37,957.26 23,261.96 101,620.19
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11 Tax expense 10,699.49 9,329.78 36,352.98
12Profit from ordinary activities after tax before
Minority Interest (10 – 11)27,257.77 13,932.18 65,267.21
13 Extraordinary items (net of tax expense) - - -
14Profit from ordinary activities after tax before
Minority Interest (12 – 13)27,257.77 13,932.18 65,267.21
15 Less: Share of Minority Interest 28.99 (1,034.06) 372.83
16 Add: Share in Profit of associates (1,500.15) 18.67 344.25
17 Profit after tax (14-15+16) 25,728.63 14,984.91 65,238.63
18Paid Up Equity Capital - (Face Value of Rs. 10 per
share)34,629.83 34,504.77 34,566.89
19 Group Reserves (excluding Minority Interest) 617,687.52
20 Minority Interest 6,286.02
21 Analytical Ratios
(i) Earnings per Share (before and after extraordinary items)
(a) Basic (not annualized) Rs. 7.44 4.35 18.9
(b) Diluted (not annualized) Rs. 7.41 4.29 18.87
(ii) NPA Ratios
(a) Gross NPA 108,447.80 65,398.10 83,208.43
(b) Net NPA 66,791.12 40,520.10 45,430.59
(c) % of Gross NPA/ Gross Advances 4.58 2.79 3.64
(d) % of Net NPA/ Net Advances 2.87 1.75 2.02
(e) % of Gross NPA/ Gross Advances (excluding NPAs acquired from other banks/ NBFCs)
3.41 1.15 2.44
(f) % of Net NPA/ Net Advances (excluding NPAs acquired from other banks/ NBFCs)
2.07 0.47 1.18
(iii) Return on Assets (average) (not annualised) 0.61 0.37 1.61
IIMT Page 41
NOTES:
1. Details of other income forming part of the Consolidated unaudited results are as follows:
Rs lakhs
ParticularsQuarter Ended
Year Ended
June-09 (Unaudited)
June-08 (Unaudited)
March-09 (Audited)
Commission, fees, exchange and brokerage 29,985.33 28,913.82 103,406.75
Premium on insurance business 42,682.85 39,243.43 230,709.63
Profit on sale of investments incl. revaluation (other than insurance business)
10,353.93 3,876.55 (8,011.18)
Others 3,606.89 9,244.33 13,968.88
Total – Other income 86,629.00 70,081.35 340,074.082. Details of other expenditure forming part of Consolidated unaudited results are as follows:
Rs lakhs
ParticularsQuarter Ended
Year Ended
June-09 (Unaudited)
June-08 (Unaudited)
March-09 (Audited)
Brokerage 3,794.02 6,537.76 28,244.66
Depreciation 3,320.06 2,928.08 12,593.23
Rent, taxes and lighting 5,765.39 5,158.69 22,085.27
Others 16,504.42 23,805.40 94,957.53
Total – Other operating expenses 29,383.89 38,429.93 157,880.69 3. Provisions and contingencies are net of recoveries made against accounts which have been
written off as bad in the previous year/s.
4. The consolidated financial results are prepared in accordance with Accounting Standard – 21, “Consolidated Financial Statements “ and ( AS ) - 23 “ Accounting for investment in associates in
consolidated financial statement “ issued by The Institute of Chartered Accountants of India.
5. Other income in the consolidated results for the reporting periods is net of sub-brokerage paid in the broking subsidiary amounting to Rs. 1,520.76 lakhs for the quarter ended 30th June, 2009 (Rs.
1,089.68 lakhs for the quarter ended 30th June, 2008), for year ended 31st March, 2009 Rs. 3,772.46 lakhs.
IIMT Page 42
6. Figures for the previous period/ year have been regrouped wherever necessary to conform to current period / year presentation.
KOTAK MAHINDRA BANK LIMITED (STANDALONE)
Registered Office: 36-38A, Nariman Bhavan, 227, Nariman Point, Mumbai 400 021
Unaudited Financial result for the period ended 30 June 2009
Rs lakhs
Sr No
ParticularsQuarter Ended Year Ended
Jun-09 (Unaudited)
Jun-08 (Unaudited)
Mar-09(Audited)
1 Interest earned (a+b+c+d) 76,730.23 71,246.77 306,514.40
(a) Interest/ discount on advances/ bills 60,973.56 56,444.10 249,372.58
(b) Income on investments 15,718.70 14,511.02 55,840.38
(c) Interest on balances with RBI & other banks 20.42 250.08 1,172.35
(d) Others 17.55 41.57 129.09
2 Other income 12,692.90 8,312.61 35,786.26
3 Total income (1+2) 89,423.13 79,559.38 342,300.66
4 Interest expended 35,832.13 36,000.07 154,659.75
5 Operating expenses (a+b) 25,161.63 31,200.96 119,642.29
(a) Payments to and provisions for employees 12,120.11 15,206.21 55,683.48
(b) Other Operating expenses 13,041.52 15,994.75 63,958.81
6Total expenditure before provisions &
contingencies (4+5)60,993.76 67,201.03 274,302.04
7 Operating Profit (3-6) 28,429.37 12,358.35 67,998.62
8 Other provisions & contingencies (See Note 1) 15,741.72 4,169.85 25,392.88
9 Exceptional items - - -
10Profit / Loss from ordinary activities before tax
(7-8-9)12,687.65 8,188.50 42,605.74
11 Provision for taxes 3,656.54 2,735.34 14,996.02
12Net Profit / Loss from Ordinary Activities after
tax (10-11)9,031.11 5,453.16 27,609.72
13 Extraordinary items (net of tax expense) - - -
14 Net Profit / Loss for the Period (12-13) 9,031.11 5,453.16 27,609.72
15 Paid Up Equity Capital - (Face Value Rs. 10 per 34,629.83 34,504.77 34,566.89
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share)
16 Reserves excluding revaluation reserves 346,794.90
17 Analytical Ratios
(i) % of shares held by Govt. of India - - -
(ii) % Capital adequacy ratio (See Note 3) 18.57 18.58 20.01
(iii) Earnings Per Share (EPS) for the period
- Basic Rs. 2.61 1.58 8
- Diluted Rs. 2.6 1.56 7.99
(iv) NPA Ratios
(a) Gross NPA 86,996.71 52,659.43 73,071.09
(b) Net NPA 52,910.20 31,637.34 39,684.20
(c) % of Gross NPA to Gross Advances 4.95 3.17 4.31
(d) % of Net NPA to net Advances 3.07 1.93 2.39
(e) % of Gross NPA to Gross Advances (excluding NPAs acquired from other banks and NBFCs)
3.38 1.34 2.7
(f) % of Net NPA to net Advances (excluding NPAs acquired from other banks and NBFCs)
1.98 0.57 1.26
(g) Return on Assets %(average) - Not Annualized 0.3 0.21 1.03
18 Public Shareholding
(i) No. of shares 178,445,597 161,642,329 164,556,059
(ii) % of shareholding 51.54 46.85 47.62
19 Promoters and promoter group shareholding
a) Pledged/encumbered
- Number of shares 50,000 50,000
- Percentage of shares (as a % of the total shareholding of promoter and promoter group)
0.03% 0.03%
- Percentage of shares (as a% of the total share capital of the company)
0.01% 0.01%
b) Non-encumbered
- Number of shares 167,793,544 181,053,669
- Percentage of shares (as a% of the total shareholding of promoter and promoter group)
99.97% 99.97%
- Percentage of shares (as a % of the total share capital of the company)
48.45% 52.38%
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Segment Results
The reportable segments of the bank are as under:
Segment Principal activity
Treasury and BMUMoney market, forex market, derivatives, investments and primary
dealership of government securities and Balance Sheet Management Unit (BMU) responsible for Asset Liability Management.
Retail BankingIncludes lending, deposit taking and other services/ products including
credit cards.
Corporate/Wholesale BankingWholesale borrowings and lendings and other related services to the
corporate sector which are not included under retail banking.
Sr No
Particulars
Quarter EndedYear
Ended
30th June, 2009
(Unaudited)
30th June, 2008
(Unaudited)
31st March, 2009
(Audited)
1 Segment Revenue
a. Treasury and BMU 25,272.74 18,310.81 91,744.55
b. Corporate/ Wholesale Banking 22,658.08 24,225.83 88,793.21
c. Retail Banking 67,390.57 62,755.65 275,219.05
Sub-total 115,321.39 105,292.29 455,756.81
Less : Inter-segmental revenue 25,898.26 25,732.91 113,471.09
Add : Unallocated Income - - 14.94
Total 89,423.13 79,559.38 342,300.66
2 Segment Results
a. Treasury and BMU 8,852.67 275.58 12,928.58
b. Corporate/ Wholesale Banking 5,698.61 7,021.70 22,534.32
c. Retail Banking (1,863.63) 891.22 7,127.90
Sub-total 12,687.65 8,188.50 42,590.80
Add : Unallocated Income - - 14.94
Total Profit Before Tax 12,687.65 8,188.50 42,605.74
3Capital employed (Segmental Assets less
Segmental Liabilities)
a. Treasury and BMU 147,730.22 128,259.35 124,493.33
b. Corporate/ Wholesale Banking 86,502.28 84,869.46 98,696.41
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c. Retail Banking 153,683.43 142,564.11 152,686.44
d. Unallocated 5,619.29 4,348.22 5,485.61
Sub-total 393,535.22 360,041.14 381,361.79Notes
1. Provisions and contingencies are net of recoveries made against accounts which have been written off as bad in the previous period/ year.
2. Stock options aggregating to 6.29 lakhs were exercised by the employees during the quarter and 110.35 lakhs stock options were outstanding with employees of the Bank and its
subsidiaries as at 30th June, 2009.
3. The Bank has adopted Basel II framework as of 31st March 2009. Accordingly the Capital Adequacy Ratio (CAR) as at 30th June, 2009 and as at 31st March, 2009 is as per Basel II
framework and as at 30th June, 2008 is as per the Basel I framework.
4. The Bank had no outstanding shareholder complaints as at 31st March, 2009. During the quarter the Bank received 12 complaints from shareholders. All shareholder complaints have been resolved
and there are no pending complaints as at 30th June, 2009.
5. Figures for the previous period/year have been regrouped wherever necessary to conform to current period / year presentation.
6. There has been no change in significant accounting policies during the quarter.
7. The results for the quarter ended 30th June 2009 have been subjected to a “limited review” by the statutory auditors of the bank.
MAJOR COMPETITORS
IIMT Page 46
Indian govt sector banks:
State Bank of India
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Central Bank of India
Punjab national Bank
Oriental Bank of commerce
Old generation private sector banks
Federal Bank
Karnataka Bank
New generation private sector banks
HDFC Bank
ICICI Bank
Axis Bank
IDBI Bank
Foreign banks
HSBC
Standard Chartered Bank
IIMT Page 47
Distribution companies
NBFC’s:
Fulltron India
Cholamandalam
Future money
Tata finance
Dukes finance
Muthoot finance
IIMT Page 48
OBJECTIVE OF THE STUDY
To find out the individual requirements of investors-customers.
To analyze whether customers are aware of & utilizing the product and services
provided by Kotak.
To access whether the investment account of Kotak is beneficial and helping the
customers to increase their wealth.
To properly track the wealth creation products & being advised to the correct
target segment/audience.
To find whether customers are satisfied with Kotak as an investment destination.
IIMT Page 49
INVESTMENT AVENUES OFFERED BY KOTAK
Mutual Funds:
A mutual fund is a professionally managed firm of collective investments that collects
money from many investors and puts it in stocks, bonds, short-term money market
instruments, and/or other securities. The fund manager, also known as portfolio
manager, invests and trades the fund's underlying securities, realizing capital gains or
losses and passing any proceeds to the individual investors. There is a variety of mutual
funds.
There are debt funds that invest only in bonds. Thus the returns they get are more of
less similar to the returns from a fixed deposit. They usually invest in bonds with higher
ratings and thus are safe to a great degree.
There are equity funds that invest only in stocks. Stocks carry higher risk and probability
of higher returns. Hybrid funds / balanced funds invest in equity as well as debt. Money
market funds invest in short term investments such as treasury bills, certificates of
deposit, commercial paper, inter-bank call money, government securities etc. These are
best suited for people who have a large sum of money to invest for a short time with
minimum risk.
Kotak Private Equity Kotak Private Equity Group (KPEG) is a specialist
Private Equity arm of Kotak Mahindra Group. It is a leading Private Equity Fund
Manager focused on helping emerging corporate and mid-size enterprises evolve
into tomorrow's industry leaders. KPEG provides these companies a combination
of equity capital, strategic support and other value added services, playing a pro-
active role with the entrepreneur in building the business.
IIMT Page 50
It invest in companies across a broad range of industries seeking capital for business
expansions, acquisition financing and buyout transactions. The size of their initial
investment is typically between USD 15mn and 40mn depending on the nature of the
company's business, stage of growth and its financing requirements. It also lead
transactions greater than USD 40mn through co-investment from our reputed Limited
Partners, Kotak’s international relationships and/or other Private Equity Funds.
While the Kotak Group has been associated with Private Equity investments since
1997, to bring a sharper focus to the Group's Alternate Assets strategy, Kotak Mahindra
Bank initiated its first structured third party Private Equity Fund in early 2005. Since
then, the Alternate Assets business of the Group has grown to around USD 1.4 billion
under management across two asset classes namely – Private Equity & Real Estate,
both led by independent investment teams.
The Alternate Assets business currently consisting of Private Equity and Real Estate
has since been restructured under Kotak Investment Advisors Ltd (“KIAL”), a subsidiary
of Kotak Mahindra Bank, set up to focus on managing the Alternate Assets business of
the Kotak Group. As part of KIAL, KPEG currently manages / advises two funds across
two strategies – Growth Capital (India Growth Fund) and Venture Capital for Life
Sciences.
Kotak Reality Fund
Kotak Realty Funds Group (KRFG) is a division of Kotak Investment Advisors Ltd
(KIAL) that focuses on Real Estate Investment opportunities. Established in May
2005, it is one of India's first private equity funds with a focus on real estate and
real estate intensive businesses It actively considers investment opportunities
with the local developers and projects in the residential, commercial and other
real estate sectors.
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Kotak Realty Funds Group (KRFG) plans to opportunistically invest in and add value to
Portfolio Investments across a broad spectrum of real estate sectors and geographies.
Its investment objective is to produce long-term capital appreciation for investors by
providing capital to real estate-related projects and companies across India. Kotak
Realty Funds Group (KRFG) will seek to invest in opportunities that are best positioned
to capitalize on the positive economic impact of forces driving Indian real estate,
including:
Long-term property enhancement driven by development of urban infrastructure
such as new airports, mass transit systems, intra-city expressways and national
events such as the Commonwealth Games 2010
Increased off shoring by international companies
Demographic shifts stimulating home ownership
Robust consumer spending favoring organized retail
Institutionalization of property markets
Inflow of foreign business travelers and tourists
Large cohort of well-educated technical workers and expansion of the middle
class
Proliferation of financial services to the retail market
INSURANCE:
Insurance is a form of risk management primarily used to hedge against the risk of a
contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from
one entity to another, in exchange for a premium. An insurer is a company selling the
insurance. The insurance rate is a factor used to determine the amount, called the
premium, to be charged for a certain amount of insurance coverage. Risk management,
the practice of appraising and controlling risk, has evolved as a discrete field of study
and practice.
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As an insurance broker, Kotak provides following insurance product to its client:
1) Kotak Smart Advantage optimizes the return on your premiums paid through a
smart mix of assured additions and 100% premium allocation. Your first year’s premium
contributes towards guaranteeing you an Assured Addition Advantage that boosts your
fund value at regular intervals throughout the term of the policy. The longer your
premium paying term, the higher will be the value of the advantage. The Assured
Addition Advantage is a powerful combination of two benefits:
A. Fixed Advantage
The Fixed Advantage benefit is an assured value guaranteed at the end of your
premium payment term. This benefit is calculated as a percentage of your first year
premium depending on the premium payment term chosen, provided your policy is in
force and all premiums are fully paid up to date.
Premium Payment Term 3 or 5 years 10 years 15 years 20 years 25 years 30 years.
Fixed Advantage Benefit (as a percentage of First Year Premium) 100% 110% 135%
175% 225% 275%.
B. Dynamic Advantage
The Dynamic Advantage benefit is an assured bonus addition credited to your fund
value at the end of every 10th, 15th, 20th, 25th and 30th policy year. This benefit will be
calculated as a percentage of the average value of funds in the three years preceding
the benefit allocation, provided your policy is in force and all premiums are fully paid up
to date.
At the end of Policy Year 10 years 15 years 20 years 25 years 30 years.
Dynamic Advantage Benefit (as a percentage of average fund value in the last three
years) 1.10% 1.35% 1.75% 2.25% 2.75%.
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2) Kotak Flexi plan. : Kotak flexi plan is another ideal option if you want a
comprehensive long-term solution for managing your financers. You want insurance to
be an important part of portfolio to protect your love ones. You think that financial
concepts require lot of time to grasp and are probably best left to the experts.
How does this Plan work?
Decide the amount of savings (premium) one should make each year.
Decide the term of policy depending on the goals that one have in mind.
Choose the fund option to balance one’s risk profile and tenure of investment.
Opt for any of the optional rider benefits to enhance flexibility and boost the life style
benefits of one’s plan.
Key Features:
InvestmentOption
Equity(high risk)
Debt(medium risk)
Cash and money market (low risk)
Risk return profile
Objective
AggressiveGrowthGuaranteed / dynamicGrowth
60%-100%
40%-80%
0%-40%
20%-60%
0%
0%-20%
AggressiveHigh risk high return.
Downside risk
Guaranteed / dynamicBalanced
30%-60% 20%-70% 0%-20% ModerateMedium growth through diversified investment
Dynamic bond-
0%-100% 0%-20% SafeLow risk and fixed return
Dynamic gilt-
80%-100% 0%-20% SafePreserved capital and low risk
IIMT Page 54
Term deposits
Invest in Kotak Bank Term Deposit. We offer attractive returns on term deposits and
investing in them is really simple and convenient.
Features & Benefits
Ease and convenience of operation Not a Kotak Bank customer and wish to apply for
term deposit, online. For the first time in India, New To Bank customer can also apply
online for term deposit.
If you are an existing customer, you can place a term deposit through Phone Banking or
Net Banking. What's more, you can even renew this deposit by placing an instruction
over phone. Needless to mention, he can do all this and more by walking across into
any of our branches.
Liquidity through overdraft or sweep-in facility. Your deposit will be available to you
should you need them in case of an emergency. You can avail upto 85% overdraft
against your term by paying 2% above your deposit rate. This facility is available for
deposits above Rs.50,000 for a tenure of 181 days or more. You can also choose to link
your term deposit to your savings / current account, whereby if need be, your term
deposit will automatically be encased to meet your withdrawal requirement.
No penalty on pre-mature encashment in case your term deposit is pre-maturely
enchased, you will earn interest at the rate prevailing on the date of deposit for the
withdrawn amount.
Demat/Equity:
Kotak Mahindra provides end-to-end equity solutions to institutional and individual
investors. Consistent delivery of high quality advice on individual socks, Sectors trends
and investment strategy has established us a competent and reliable unity across the
country.
IIMT Page 55
Client can trade through us online on BSE and NSE for both equities and derivatives.
They are supported by dedicated sales and trading teams in our trading desk across the
country .research and investment ideas can be accessed by clients either through their
designated dealers, email, web or SMS.
Gold as an investment:
Gold is the oldest currency in the world and is coveted across continents and cultures
for a variety of reasons.
Maintains long-term value Market cycles have their ups and downs, but gold has
maintained its long-term value. Paper currencies may rise and fall but gold
always endures. Gold has demonstrated its capacity to store value for centuries
Safe refuge during times of calamities like war or economic crisis, there may be a
negative effect on investments like currencies, bonds and equities, but may have
an opposite effect on the value of gold. Also gold is not a liability of any
government or corporation and hence it does not run a risk of becoming
worthless due to unexpected events.
Inflation Hedge The value of gold, in terms of real goods and services that it can
buy, has remained remarkably stable whereas the purchasing power of many
currencies has generally declined
Helps build a robust portfolio adding gold to a portfolio introduces an entirely
different asset class. Portfolios that contain gold are generally more robust and
better able to cope with market uncertainties than those, which don't. Recent
independent studies have shown that traditional diversifiers (such as bonds and
alternative assets) often fail during times of market stress or instability. Even a
small allocation of gold has been proven to significantly improve the consistency
of portfolio performance during both stable and unstable financial periods.
Effective Diversifier diverse investments help protects the portfolio against
fluctuations in the value of any single asset class. Gold is an excellent portfolio
diversifier because its performance tends to move independently of other
investments and key economic factors.
IIMT Page 56
Both tangible and liquid Gold is an asset that is both tangible and liquid, unlike
real estate, which is tangible but not liquid, or company shares and bonds, which
are liquid but not tangible.
IIMT Page 57
IIMT Page 58
CHAPTER 3
ANALYSIS AND INTERPRETATION OF DATA
GENDER OF RESPONDENTS
MALE 38
IIMT Page 59
FEMALE 12
76%
24%
GENDER OF RESPONDENTSMALE FEMALE
Analysis:
Among all respondents 76 % are male and 24 % are female. Therefore female
respondents are less in responding to the investment options.
AGE OF RESPONDENTS
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Age No. of Respondents20-30 930-40 1540-50 1050-60 14
Above 60 2
18%
30%
20%
28%
4%
No. of Respondents20-30 30-40 40-50 50-60 Above 60
Analysis:
The most of the respondents from the age group 30-40 are more interested in
investments.
IIMT Page 61
OCCUPATION OF THE RESPONDENTS:
OCCUPATION NO OF RESPONDENTS
SERVICE 19
BUSINESS 12
SELF EMPLOYED 11
PROFESSIONAL 8
38%
25%
23%
15%
OccupationService Business Self Employed Professional
Analysis:
Service class is keener to make investment and professionals are least concerned with
investment.
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ANNUAL INCOME OF THE RESPONDENTS:
Annual income No of respondents
2-5 lakhs 25
5-10 lakhs 11
10-15 lakhs 9
Above 15 lakhs 5
50%
18%
23%
10%
Annual Income2-5 Lakhs 5-10 Lakhs 10-15 Lakhs Above 15 Lakhs
Analysis:
Persons with Annual income of 2-5 lakhs are more attracted to savings as to make
future consumptions with maximum 50 % than other income earners.
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MEMBERS IN YOUR FAMILY
Members No of respondents
1-3 6
4-6 27
7-10 13
More than 10 4
13%
55%
25%
8%
No. of Family Members1-3 4-6 7-10 More than 10
Analysis:
Maximum respondents are from family of 4-6 members with 55 % share.
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INVESTMENTS
Product No. of Respondents
Kotak Gold Eternity 5
Kotak Trinity 8
Kotak Mutual Fund 15
Kotak Life Insurance 9
Kotak Reality Fund 3
13%
20%
38%
23%8%
InvestmentsKotak Gold Eternity Kotak Trinity Kotak Mutual FundKotak Life Insurance Kotak Reality Fund
Analysis:
People are more interested in investing in mutual funds than other products of Kotak.
AMOUNT INVESTED:
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Amount No of respondents
Less than 50,000 12
50,000-1,00,000 24
1,00,000-5,00,000 8
More than 5,00,000 6
24%
48%
16%
12%
Amount of InvestmentLess than 50,000 50,000-1,00,000 1,00,000-5,00,000 More than 5,00,000
Analysis:
The amount of investment made is more in 50,000-1,00,000 range i.e. 48 %.
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HOLDING PERIOD OF INVESTMENT:
Period No of respondents
Less than 1 year 8
1-5 years 23
5-10 years 14
1-15 years 5
16%
46%
28%
10%
Period of InvestmentLess than 1 year 1-5 years 5-10 years 10-15 years
Analysis:
The period of investment for 46 % respondents is 1-5 years and less people are
interested in investing for 10- 15 years.
PURPOSE OF INVESTMENT
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Purpose No of respondents
Rate of return 20
Safety 9
Risk factor 6
Tax benefit 15
Rate of return Safety Risk factor Tax benefit
20
9
6
15
Purpose of InvestmentPurpose of Investment
Analysis:
The purpose for investment for most of the respondents is for better rate of return and
risk factor is less important for them.
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RISK TOLERANCE:
Risk Tolerance No of respondentsHigh 15
Medium 25low 10
30%
50%
20%
Risk TolerenceHigh Medium Low
Analysis:
50 % of the respondents are medium risk taker and 30 % of the respondents are high
risk taker and 20 % of the respondents are low risk taker.
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EXPECTED RATE OF RETURN
Expected return No of respondents
5-10% 13
10-15% 17
15-10% 12
More than 20% 8
5-10 % 10-15 % 15-20 % More than 20 %
13
17
12
8
Expected rate of returnExpected rate of return
Analysis:
Respondents with expected return of 10-15 % are 17 and more than 20 % return are 8.
Therefore the respondents are less expected of high returns.
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RETURN EARNED ON INVESTMENT
Return earned %
Equity 15
Mutual funds 20
Insurance 20
gold 25
15%20% 20%
25%
RETURN EARNEDEQUITY MUTUAL FUNDS INSURANCE GOLD
Analysis:
Gold has the maximum return on investment for the period of one year holding and after
that insurance and mutual funds have given equal returns which shows that investment
made through asset management would give better returns also.
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OVERALL RETURN EARNED
Overall return earned %
High risk 27
Medium risk 16
Low risk 9
HIGH RISKMEDIUM RISK
LOW RISK
27%
16%
9%
RETURN ON TOTAL INVESTMENT
Analysis:
The respondents who have high risk affordability have 27 % return and who have
medium risk have 16 % return and who have low risk profile 9 % return.
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CHAPTER 4
FINDING, SUGGESTIONS AND LIMITATIONS
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FINDINGS
1. As per analysis it is found that people want to takes risk as 55% people were
ready to take moderate risk & 25% people were ready to take the high risk so to
get the higher return.
2. People are more interested in mutual funds than direct exposure to equity
market.
3. People in Raipur are more aware about gold as an investment.
4. Also people want to save their income tax so that is why they invest in various
products offered by the bank.
5. The promotional activity of KMBL is quite average due to which people generally
do not know about KMBL.
6. As per analysis of data it was found, that majority of customers want to grow their
money through mutual fund and insurance.
7. While doing summer training it was found that most of the people are not aware
about KMBL.
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SUGGESTIONS
1. Spread awareness about the investment facilities and the products among the
people of Raipur.
2. KMBL should increase the number of branches in Chhattisgarh as it becomes a
hindrance in the path of their success, as willing individuals don’t get associated
due to unavailability of branches.
3. People in Raipur are not aware of Kotak Mahindra as a bank therefore they
should also focus on promotional activities
4. KMBL should advise their customers regularly about their various investment
schemes.
5. KMBL should open more ATMS as it has to increase the flow of money more.
6. KMBL should promote their bank through advertisement or through other
channel. So that everybody should get aware of this bank.
7. KMBL must emphasize more to make more and more customers contact.
8. Time to time KMBL should take their customers feedback, so that they can asses
themselves.
9. KMBL should launch the following products soon i.e. home loans, credit cards
and education loans. because many person are there who have asked about
these products.
10.Mobile banking provided KMBL is not working properly, so KMBL should take this
into consideration and try to eradicate such problems.
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Limitations:
Every work has its own limitations. Limitations are extent to which the process
Should not exceed. The following limitations for the project are:
1. Duration of project was not enough to make our conclusion on such a vast.
2. Time constraints have also become a major limitation.
3. The sample size taken for drawing the conclusion was not sizeable.
4. Investor ignorance was faced during discussions with respondents.
5. Answers given by the customers and bank personnel might be biased, which
may have my project.
6. Bias or inhibition of individuals in order to fill the questionnaire.
7. Since the sample size is small thus we could not come to an exact conclusion.
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CONCLUSIONS
1. From the analysis we reach to the conclusion that people want to invest in such
product where they get high return with minimal risk.
2. Investment in equity market should be more for high return.
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BIBLIOGRAPHY AND WEB I LIOGRAPHY
Bibliography and Webiliography includes references, books, magazines, web sites and
newspapers that are used during any research. I used following bibliography and
Webiliography during my research project.
1. Kothari C.R. “Research Methodology”-New Age International Publishers.
(Publication Year -2008) Page No.152
2. ICFAI journal of behavioral finance,july 2009
3. www.google.com
4. www.wikipedia
5. www.kotak.com
6. Others.
Questionnaire
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Respected Sir/Madam,
I am conducting a research titled as “ANALYSIS OF RETURN ON INVESTMENT OF CUSTOMERS OF KMBL VIS-A-VIS MARKET TRENDS AND CUSTOMER NEEDS”. I need your help in conducting this survey. I need your precious and valuable inputs/views/opinions. You can give your precious inputs with the help of filling the questionnaire which has given below. The information will keep confidential and will be exclusively used for academic purpose.
Respondent’s Information :
NAME:ADDRESS:MOBILE NO:GENDER: [ ] Male [ ] Female
AGE: [ ] 20-30 [ ] 30-40 [ ] 40-50 [ ] 50-60 [ ] above 60
OCCUPATION: [ ] Service [ ] Business [ ] Self employed [ ] Professional
1. What is your annual income?[ ] 2-5 lakh [ ] 5-10 lakh [ ] 10-15 lakh [ ] above 15 lakh
2. How many members are there in your family? [ ] 1-3 [ ] 4-6 [ ] 7-10 [ ] More than 10
3. Do you have any investment in KMBL?[ ] Yes [ ] No
4. If yes, then in which product you have invested[ ] Kotak gold Eternity [ ] Kotak Trinity [ ] Kotak mutual fund[ ] Kotak life insurance[ ] Kotak reality fund
5. How much amount you have invested/you want to invest?[ ] Less than 50,000 [ ] 50,000-1,00,000
[ ] 1,00,000-5,00,000 [ ] More than 5,00,000
6. On which investment option you want to invest/have invested:Investment option Amount (Rs.)
Mutual fundInsuranceTrinityGoldReality fund
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7. If mutual fund, please give details about product and return earned:Product name Amount invested
(Rs.)Return earned (%)
8. If insurance, please give details about product and return earned:Product name Amount invested
(Rs.)Return earned (%)
9. What is the holding period of investment? [ ] less than 1 year [ ] 1-5 years [ ] 5-10 years [ ] 10-15 years
10.What was the purpose of your investment? [ ] Rate of return [ ] Safety [ ] Risk factor [ ] Tax benefit 11.How much risk you can afford? [ ] High [ ] Medium [ ] Low
12.What is the rate of return you are looking for? [ ] 5-10% [ ] 10-15% [ ] 15-20% [ ] more than 20%
13.What mode of return you prefer? [ ] Monthly [ ] Quarterly [ ] Half yearly [ ] Annually
14.What mode of investment you prefer [ ] Monthly [ ] Quarterly [ ] Half yearly [ ] Annually
Thank You for your valuable inputs and options.
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