A

PROJECT REPORT ON

‘A STUDY ON PORTFOLIO MANAGEMENT’

AT

ICICI BANK
 ABSRTRACT

As for the study of the project it deals with portfolio management and investment, individual
securities, may or may not take on the aggregate characteristics of their individual parts.

Portfolio analysis considers the determination of future risk and return in holding various
blends of individual securities. By the help of spreading risk over many securities.
Diversification of one’s holdings is intended to reduce risk in an economy in which every
asset’s return are subjected to uncertainty. Even the value of cash suffers from the in roads of
inflation. Most investors hopes that if they hold several assets’ even if one goes bad, the other
will provide some protection from an extreme loss.

The number of stocks entering into any given efficient portfolio largely determined by
boundaries. If any set on the maximum and minimum percentage can be devoted to any one
security from the total portfolio. If this percentage (weight) is free to take on any values.
I.
 INTRODUCTION TO PORTFOLIO MANAGEMENT

Financial sector

The financial sector is in a process of rapid transformation. Reforms are continuing as part of the
overall structural reforms aimed at improving the productivity and efficiency of the economy.
The role of an integrated financial infrastructure is to stimulate and sustain economic growth.

The US$ 28 billion Indian financial sector has grown at around 15 per cent and has displayed
stability for the last several years, even when other markets in the Asian region were facing a
crisis. This stability was ensured through the resilience that has been built into the system over
time. The financial sector has kept pace with the growing needs of corporate and other
borrowers. Banks, capital market participants and insurers have developed a wide range of
products and services to suit varied customer requirements. The Reserve Bank of India (RBI) has
successfully introduced a regime where interest rates are more in line with market forces.

Financial institutions have combated the reduction in interest rates and pressure on their margins
by constantly innovating and targeting attractive consumer segments. Banks and trade financiers
have also played an important role in promoting foreign trade of the country.

Banks

The Indian banking system has a large geographic and functional coverage. Presently the total
asset size of the Indian banking sector is US$ 270 billion while the total deposits amount to US$
220 billion with a branch network exceeding 66,000 branches across the country. Revenues of
the banking sector have grown at 6 per cent CAGR over the past few years to reach a size of US$
15 billion. While commercial banks cater to short and medium term financing requirements,
national level and state level financial institutions meet longer-term requirements. This
distinction is getting blurred with commercial banks extending project finance. The total
disbursements of the financial institutions in 2001 were US$ 14 billion.
Banking today has transformed into a technology intensive and customer friendly model with a
focus on convenience. The sector is set to witness the emergence of financial supermarkets in the
form of universal banks providing a suite of services from retail to corporate banking and
industrial lending to investment banking. While corporate banking is clearly the largest segment,
personal financial services is the highest growth segment.

The recent favorable government policies for enhancing limits of foreign investments to 49 per
cent among other key initiatives have encouraged such activity. Larger banks will be able to
mobilize sufficient capital to finance asset expansion and fund investments in technology.

Capital Market

The Indian capital markets have witnessed a transformation over the last decade. India is now
placed among the mature markets of the world. Key progressive initiatives in recent years
include:

 The depository and share dematerialization systems that have enhanced the efficiency of
the transaction cycle
 Replacing the flexible, but often exploited, forward trading mechanism with rolling
settlement, to bring about transparency
 The InfoTech venture Stock Exchange (NSE) with a national presence (for the benefit of
investors across locations) and other initiatives to enhance the quality of financial
disclosures.
 Corporatisation of stock exchanges.
 The Securities and Exchange Board of India (SEBI) has effectively been functioning as
an independent regulator with statutory powers.
 Indian capital markets have rewarded Foreign Institutional Investors (FIIs) with attractive
valuations and increasing returns.
 Many new instruments have been introduced in the markets, including index futures,
index options, derivatives and options and futures in select stocks.
 Insurance with the Life Insurance Corporation of India

The Life Insurance Corporation of India (LIC) is a government-owned institution, one of the
largest financial corporations in the country. Until early 2001, the LIC had a monopoly on life
insurance business in India. A series of income tax concessions and rebates provided by the
government has, over the years, greatly popularized life insurance as a savings (and risk
coverage) instrument amongst the middle classes. Largely as a result, the organization has
grown, to encompass dramatic numbers – 92 million policies in force, with total individual risk
coverage in excess of $108 billion and annual premium collection of the order of $4.2 billion by
1998-99. The LIC has 2,000+ branches distributed all over the country and as many as 650,000
agents.

Unfortunately, in spite of a concerted effort in rural areas in recent years, life insurance has
remained mainly a middle class product. It is indicative that amongst the 28

respondents of this study in rural Allahabad, only 7 held LIC policies and none of these belonged
to a family that could be classified as poor. Amongst the urban respondents in slum Delhi just
one non-poor respondent held an LIC policy. In attempting to understand the reasons for this, an
assessment of the LIC’s most popular insurance products – the Money Back Policy, the
Endowment Policy and the Marriage Endowment/Education Annuity Policy – is instructive.
Insurance role in India

With the opening of the market, foreign and private Indian players are keen to convert untapped
market potential into opportunities by providing tailor-made products:

 The presence of a host of new players in the sector has resulted in a shift in approach and
the launch of innovative products, services and value-added benefits. Foreign majors
have entered the country and announced joint ventures in both life and non-life areas.
Major foreign players include New York Life, Aviva, Tokio Marine, Allianz, Standard
Life, Lombard General, AIG, AMP and Sun Life among others.
 With competition, the erstwhile state sector companies have become aggressive in terms
of product offerings, marketing and distribution.
 The Insurance Regulatory and Development Authority (IRDA) has played a proactive
role as a regulator and a facilitator in the sector’s development.
 The size of the market presents immense opportunities to new players with only 20 per
cent of the country’s insurable population currently insured.
 The state sector Life Insurance Corporation (LIC), the largest life insurer in 2000, sold
close to 20 million new policies with a turnover of US$ 5 billion.
 There are four public sector and nine private sector insurance companies operating in
general/non-life insurance business with a premium income of over US$ 2.58 billion.
  The market’s potential has been estimated to have a premium income of US$ 80 billion
with a potential size of over 300 million people.

Venture Capital

Technology and knowledge have been and continue to drive the global economy. Given the
inherent strength by way of its human capital, technical skills, cost competitive workforce,
research and entrepreneurship, India is positioned for rapid economic growth in a sustainable
manner. To realize the potential, there is a need for risk finance and venture capital (VC) funding
to leverage innovation, promote technology and harness knowledge based ideas.

 The Indian venture capital sector has been active despite facing a challenging external
environment in 2001 and a competitive market scenario.
 There were 34 VCFs and 2 Foreign VCFs registered with SEBI in March 2002.
 According to a survey conducted by Thomson Financial and Prime Database, India
ranked as the third most active venture capital market in Asia Pacific (excluding Japan).
 There is an increased interest in India: 70 VC funds operate in India with the total assets
under management worth about US$ 6 billion.

Mutual Funds

As you probably know, mutual funds have become extremely popular over the last 20 years. What was
once just another obscure financial instrument is now a part of our daily lives. More than 80 million
people, or one half of the households in America, invest in mutual funds. That means that, in the United
States alone, trillions of dollars are invested in mutual funds.

In fact, to many people, investing means buying mutual funds. After all, it's common knowledge that
investing in mutual funds is (or at least should be) better than simply letting your cash waste away in a
savings account, but, for most people, that's where the understanding of funds ends. It doesn't help that
mutual fund salespeople speak a strange language that is interspersed with jargon that many investors
don't understand.

Originally, mutual funds were heralded as a way for the little guy to get a piece of the market. Instead
of spending all your free time buried in the financial pages of the Wall Street Journal, all you had to
do was buy a mutual fund and you'd be set on your way to financial freedom. As you might have guessed,
it's not that easy. Mutual funds are an excellent idea in theory, but, in reality, they haven't always
delivered. Not all mutual funds are created equal, and investing in mutual isn't as easy as throwing your
money at the first salesperson who solicits your business.

In this tutorial, we'll explain the basics of mutual funds and hopefully clear up some of the myths around
them. You can then decide whether or not they are right for you.

A mutual fund is nothing more than a collection of stocks and/or bonds. You can think of a mutual fund as
a company that brings together a group of people and invests their money in stocks, bonds, and other
securities. Each investor owns shares, which represent a portion of the holdings of the fund.

You can make money from a mutual fund in three ways:

1) Income is earned from dividends on stocks and interest on bonds. A fund pays out nearly all of
the income it receives over the year to fund owners in the form of a distribution.
2) If the fund sells securities that have increased in price, the fund has a capital gain. Most funds also
pass on these gains to investors in a distribution.
3) If fund holdings increase in price but are not sold by the fund manager, the fund's shares increase in
price. You can then sell your mutual fund shares for a profit.

Funds will also usually give you a choice either to receive a check for distributions or to reinvest the
earnings and get more shares.

USEFULLNESS OF MUTUAL FUNDS

• Professional Management - The primary advantage of funds (at least theoretically) is the professional
management of your money. Investors purchase funds because they do not have the time or the
expertise to manage their own portfolios. A mutual fund is a relatively inexpensive way for a small investor
to get a full-time manager to make and monitor investments.

• Diversification - By owning shares in a mutual fund instead of owning individual stocks or bonds, your
risk is spread out. The idea behind diversification is to invest in a large number of assets so that a loss in
any particular investment is minimized by gains in others. In other words, the more stocks and bonds you
own, the less any one of them can hurt you (think about Enron). Large mutual funds typically own
hundreds of different stocks in many different industries. It wouldn't be possible for an investor to build
this kind of a portfolio with a small amount of money.

• Economies of Scale - Because a mutual fund buys and sells large amounts of securities at a time, its
transaction costs are lower than what an individual would pay for securities transactions.

• Liquidity - Just like an individual stock, a mutual fund allows you to request that your shares be
converted into cash at any time.

• Simplicity - Buying a mutual fund is easy! Pretty well any bank has its own line of mutual funds, and the
minimum investment is small. Most companies also have automatic purchase plans whereby as little as
$100 can be invested on a monthly basis.

Investment Services in India

Investing can be a complicated game. Dow Jones Industrial averages, Standard and Poor's
ratings, earnings pr share, dividend yield—how's anybody who doesn't live in the financial
world supposed to make any sense out it all? Luckily for those of us who earn our livings in
areas other than finance, there are lots of companies and individuals that provide
investment services. However, even if you feel comfortable with your own investment
knowledge, there are also investment service providers to meet your needs.

Investment services can cover a wide range of functions such as:

 Buying and selling stocks

 Managing retirement funds

  Managing mutual funds

 Providing Certificates of Deposit (CD's)

 Taking on the total management of high value customers finances.

Buying and Selling Socks

Undoubtedly, the most commonly used investment service is buying and selling stocks.
Since only licensed brokers are allowed to trade stocks, an individual who wants to buy or
sell a stock is required to work through a broker.

Individual brokers work for financial services companies known as brokerage houses. In
general there are two main types of brokerages, the traditional full service broker and the
more recently developed discount broker.

Brokerage Houses

Just as the name implies, full service brokers provide a number of investment services to
people looking to trade stocks. These brokerages have large analytical departments that
study companies and make determinations as to how well the analysts think the company is
doing. This information is provided through brokers to investors to help them make
informed and profitable investment choices

Opportunities
  There is no tax on distributed income of VCFs. The income distributed by the funds is
only taxed at the hands of the investors.
 Increase in incomes with potentially high penetration of both banking and insurance
products to increase the market size, will be the powerful drivers of growth in the sector.
 Continued de-regulation and increased competition is expected to result in the Indian
financial services reach US$ 51 billion by 2007.

Portfolio Management Service -Because investing is simple but not easy. When it comes
to managing your hard-earned money, making sure it goes that extra mile is a task best left to the
experts. And who better to do it for you than the karvy. The recently launched Portfolio
Management Service is sheer music to investors' ears with the perfect symphony of our varied
expertise honed over the years with our experience in the

Stock markets.

The whole raison d'etre of the Portfolio Management Service is ensuring that your money goes
that extra mile or earns that extra return, which dramatically improves the returns structure for
your investments.

To highlight the kind of value that we add to your investments, let us consider a small example.
From the age of 25 if you were to invest INR10000/ month and manage your investments and
consequently earn a good average of 14% p.a., your wealth at the time of retirement (at the age
of 60) would be INR 11.77 million. Simultaneously if we were to manage your investment of a
similar nature (INR10000/ month from the age of 25) using all the skills, experience technology
and infrastructure at our disposal and make an increment in your returns of just 2% p.a., your
wealth at the time of retirement would be INR 21.63 million which is a whopping increment of
about INR 10 million.

There are a number of factors, which contribute to earning such a great return on your
investments.

Research
We have a team of over 15 research analysts, each with impeccable professional credentials.
With a collective experience spanning several hundred years, a veritable treasure-trove of
experience and understanding of the markets and of various sectors and companies, it comes as
no surprise that we are the obvious choice for none other than Forbes when it came to choosing
the Best of the Web for Asia. Under the Asian investing category, Forbes rates us as `…a must
read for investors across Asia'.

Asset allocation
Our investment committee led by two of our directors with impeccable reputation for stock
picking decides on asset allocation across sectors and product categories. They bring to the table
their enormous experience and knowledge of economy, market sentiment and sectoral trends. For
every portfolio, the investment strategy is decided after a careful assessment of several factors
like your investment needs, preferences and risk profile. To ensure a consistent performance, we
apply rigorous methods to measure and control risk. As our investment philosophy is not driven
by brokerage income, you may find a surprisingly low churn in the portfolios managed by us.

Timing
Proponents of the traditional long-term investment would have you believe that in the long-term,
timing hardly makes any difference. But given the extent of volatility that is prevalent in the
modern markets, stocks could swing more even in a given day more than a conservative
investors targeted return for an entire year. We have a team of dealers and technical analysts who
can help you capitalize on precisely these fluctuations in the markets.
Relationship management
As a Portfolio management customer you will have the services of your very own Relationship
Manager. Relationship Managers at India Info line are chosen after stringent checks related to
the character, integrity and the overall competence post which they undergo extensive training.
You can think of your Relationship Manager as your one point of contact for all your queries
related to your investments

BackOffice
An online back office means you always have online and anytime access to your ledger account,
your contract notes, bills and portfolio performance report. This is the result of our immense
investment in technology and systems over the years.
Apart from these you will discover many small and thoughtful features, which will add value to
your experience, literally
Objectives of the Study;

 To study the investments pattern of an investor and it’s related risk and return.

 To analyze and select the portfolio of investment.

 To help investors to choose the combination of securities reducing risk and

maximizing returns.

Scope of the study

This study covers the Markowitz model. Here in, the study covers the calculation of
correlations between the different securities in order to find out at what percentage of funds
should be invested among the companies in the portfolio. Also the study includes the calculation
of weights of individual securities involved in the portfolio. These percentages help in allocation
the funds available for investments based on the risky portfolios.
 RESEARCH METHODOLOGY

Need for the study

With the advent of increase in demand for investment in financial securities portfolio falls in the
place, in line with the current trend. The need for analysis on portfolio management and to make
an investment decision as a important in the next generation as many would like to have, their
own portfolio and investing in less risk securities.

Problem definition

How an effective and efficient portfolio can be constructed.

Methodology

Design of the study

The study is descriptive in nature.

Where 1 primary data
2 secondary data

Primary data has been obtained from the interaction with my guide.

Secondary data is collected from various other sources. From the company site and other reports
of the company.

OBJECTIVESOF THE STUDY

 PRIMARY OBJECTIVE

» To learn the construction of an efficient and effective portfolio.

 SECONDARY OBJECTIVES

» To find the effective working of a portfolio.

» To enhance the portfolio performance with high returns and low

Draw downs.

» To set guidelines for investment returns and risk taking.

Limitations of the study

The study has certain constrains which has limited to its scope and objects of the study.

1. The fulfillment of project to 45 days.

2. From BSE and NSE listing – a very few and randomly selected scripts are analyzed.

3. Construction of portfolio restricted to two- assets based in markowitz model.

4. Limited industries are only covered in the stud

 CONCEPTUAL BACKGROUND

INTRODUCTION TO PORTFOLIO MANAGEMENT

PORTFOLIO:
A portfolio is a collection of securities. Since it is rarely desirable to invest the entire
funds of an individual or an institution in a single security, it is essential that every security be
viewed in the portfolio context. Thus it seems logical that the expected return of each of the
security contained in the portfolio.

Portfolio analysis considers the determination of future risk and return in holding
various blends of the individual securities. Portfolio expected return is a weighted average of the
expected return of individual securities but portfolio variances, inshort contrast, can be
something less then a weighted average of security variance. As a result an investor can
sometimes reduce portfolio risk by adding security with greater individual risk than any other
security in the portfolio. This is because risk depends greatly on the co-variance among returns
of individual security. Portfolio which is combination of securities may or may not take an
aggregate characteristics of their parts.
 Since portfolios expected return is a weighted average of the expected return of its
securities, the contribution of each security to the portfolio’s expected returns depends on its
expected returns and its proportionate share of the initial portfolio’s market value. It follows that
an investor who simply wants the greatest possible expected return should hold one security; the
one’ which is considered to have a greatest, expected return. Very few investors do this, and very
few investments advisors would counsel such an extreme policy. Instead, investors should
diversify, meaning that their portfolio should include more than one security.

OBJECTIVES OF PORTFOLIO MANAGEMENT

The objectives of investments/portfolio management can be classified as follows

Basic objectives

The basic objective of investment/portfolio management are

a) To Maximize Yield, and

b) To Minimise risk

Secondary objectives

The following are the other ancillary objectives are

c) Regular return

d) Stable income

e) Appreciation of capital
 f) More liquidity

g) Safety of investments, and

h) Tax benefits.

Need for portfolio management:

Portfolio management is a process encompassing many activities of investment in assets

and securities. It is a dynamic and flexible concept and involves regular and systematic analysis,
judgments and actions. The objective of this service is to help the unknown investors with the
expertise of professionals in investment portfolio management. It involves construction of a of a
portfolio bases upon the investors objectives, constraints, preferences for risk and return and tax
ability. The portfolio is reviewed and adjusted from time to time in tune with the market
conditions. The evaluation of portfolio is to be done in terms of targets set for a risk and return.
The changes in the portfolio are to be effected to meet the changing conditions.

Portfolio construction refers to the allocation of surplus funds in hand among a variety of
financial assets open for investments. Portfolio theory concerns itself with the principles
governing such allocations. The modern view of investments is oriented more towards the
assembly of proper combinations of individual securities to form investment portfolios. A
combination of individual securities to form investments portfolios. A combination of securities
held together will give a beneficial result if they are grouped in a manner to secure higher return
after taking into consideration the risk elements.
 The modern theory is of the view that by diversifications, risk can be reduced. The
investor can make diversification either by having a large number of shares of companies in
different region, in different industries or those producing different types products lines. Modern
theory believes in the perspective of combination of securities under constraints of risk and
return.

Elements of portfolio management

Portfolio management is an on-going process involving the following the following basic
tasks:

1. Identification of the investor’s objectives, constraints and preferences.

2. Strategies are to be developed and implemented in tune with investments policy

formulated.

3. Review and monitoring of the performance of the portfolio.

4. Finally the evaluation of the portfolio

 METHODOLOGY OF STUDY

For implementing the study, of securities or stocks consisting the sensex market are
selected of one year opening and closing share movement price date from BSE on date.

Closing price – Opening price

R= -------------------------------------------- ×100
Opening price

To know the average (R) the following formula has been used

Average (R’) = ∑ R
N

The next step is to know the risk of the stock or security; the following formula is given below.
Std.dev = √ Variance

n
Variance =1/n-1∑ (R-R’)²
t=1
Where

(R-R’) = squares of different between sample and mean.

n = number of sample observations.

After that, the correlation of the securities is calculated by using the following formula;

Correlation Coefficient (rAB) = COV AB

(σA)(σB)

Co-variance (COVAB ) = 1/n ∑ (RA)-(R’A)(RB-R’B)

t =1
Where,

(RA-R’A)(RB-R’B) =combined deviations of A&B.

(σA) (σ B) =Standard Deviations of A&B

COV AB = Covariance between A&B

N= no of observations.

The next step would be the construction of the optimal portfolio on the basis of what
percentage of investment should be invested when two securities and stocks are combined i.e.,
calculations of assets portfolio weights by using minimum equation, which is given below

σB (σ B – rABσA)
WA = σA² +σB² - 2rABσAσB

WB = 1 - WA

Where WA= proportion of investment in A

WB= proportion of investment in B

The next and final step is to calculate the portfolio risk (combined risk) that shows
how much is reduced by combining two stocks or securities by using this formula.

FORMULA:
σp = √ σA²- WA² +σ B² W B² + 2r AB σA σA WA WB

Where,

σp = Portfolio Risk

σA = Standard Deviation of security A

WA = Proportion of investment in security B

σB = Standard Deviation of security of B

WB = proportion of investment in security B

rAB = Co-relation Coefficient between security A&B.

PORTFOLIO ANALYSIS

Portfolio analysis is needed for the selection of optimal portfolio by

rational risk adverse investors. Portfolio analysis is essential for portfolio construction. The
objective of the portfolio or maximize the risk subject to the desired level of return on the
portfolio or maximize the return subject to the constraint of a tolerable level of risk. It enables
the investors to identify the potential securities, which will maximize the following objectives
such as security of the principle, stability of income, capital growth marketability, liquidity &
diversification.

Concept of Risk

Investment in shares has its own risk or uncertainty, which arises out of variability
of returns, yields and uncertainty of appreciation or depreciation of shares prices, loss of liquidity
etc. this risk over time, is capital appreciation. This risk is measured statistically by the degree of
variance or standard deviation of returns. Normally higher the risk that the investor taker higher
is the return.

Diversification of Risk:

The process of combining securities in a portfolio is known as diversification. The

aim of diversification is to reduce total risk without sacrificing portfolio. The risk in a portfolio
can be reduced by a proper diversification into a number of strips. The efforts to spread and
minimizes portfolio risk takes the form of diversification. Most investors prefer to hold several
assets rather than putting all their eggs into one basket with hope that if one goes bad, the other
will provide some protection from the extreme loss.

PORTFOLIO SELECTION

The determination and selection of a portfolio is a complicated affair as there is a

possibility of infinite number of combinations of various securities that can enter a portfolio. The
securities available to an investor can be combined in any proportion hence any number of
portfolios can be built. Each such portfolio can be described in terms of return and risk.

Portfolio construction refers to the allocation of funds among a variety of financial assets open
for investment. The objectives of the theory is to elaborate the principle in which the risk can be
minimized, subject to desired level of return on the portfolio or maximized the return, subject to
constrain of tolerable level of risk.

The most popular models used for portfolio selection are:

Markowitz model.

Capital assets pricing model.

 Markowitz model

According to Markowitz, the portfolio theory establishes a relationship between

portfolios expected return and its level of risk as the criteria for selecting the optimal portfolio.
Thus two measures were suggested for evaluating the merits of portfolio.

1) The expected return from the portfolio.

2) The level of risk exposure associated with the portfolio.

This theory believes in asset correlation and combining assets so as to lower the risk.
From the efficient set of portfolios the best one would be selected on the basis of the risk
and returns. These risk and returns are calculated using standard deviations and the
coefficient of variations. It is also called as the “full co-variance model”. The expected
return on the portfolio is calculated by using the following;

N
Rp = ∑ RiXi

 I=1
 Where, Rp = expected return on portfolio

Ri = expected return on security ‘i’

 Xi = the proportion of portfolio investment in security
N = total number of securities in the portfolio.
The risk of a portfolio comprising of shares A and B van be expressed using variance as the
measures of risk. σ
Covariance of AB = X2 Aσ2 A +X2 Bσ2 B + 2XAXBrAB σA σ B

Cov.AB = the variance between the rates of return on shares A and B,

Where,

rAB = Coefficient of correlation between A and B shares

X2 A = Proportion invested in shares A

2
X B = proportion invested in shares B

σ2 A = Variance of the rate of return on share A.

σ2 B = Variance of the rate of return on share B.

The term covariance explains the relationship between the movements in the rates of
return from shares A and B; it is derived from the following formula:

Cov.AB = rAB σA σ B
 Capital asset pricing model

The Capital Asset Pricing Model (CAPM) attempts to measure the risk of a security in
the portfolio. It considers the required rate of return of a security on the basis of its contribution
to total portfolio risk. It provides that in a well-functioning efficient market, the risk premium
varies indirect proportion to risk. It also provides a measure of risk premium and method of
estimating market risk return line. The risk of well-diversified portfolio depends on the market
risk of the securities included in portfolio. The market risk of the security is measured in terms of
its sensitivity to the market movements. The core idea of CAPM is that only non-diversifiable
risk is relevant to the determination of the expected return on any asset.

Capital Market Line (CMP)

The portfolio theory states that rational investors would chose a combination of “efficient
frontier” but in capital market line relationship of total risk and expected return is reflected.

Security Market Line (sml)

For all well diversified portfolios nonsystematic risk tend to go to zero, and the only relevant risk
measured by beta SML describes the expected return for all assets and portfolios of assets,
efficient or not. The higher the beta the higher must be the return. The relationship between
expected return and beta is linear.

Portfolio revision
Irrespective of how well a portfolio is constructed, it soon tends to change and hence
needs to be monitored and revised periodically. Portfolio once constructed undergoes changes in
the market prices; reassessment of companies, the portfolio risk and the proportion in each asset
class will change to bring back the portfolio to the targeted level of beta or risk and duration.
Overtime several things are likely to happen.

This usually involves two things:

Portfolio rebalancing.

It involves reviewing and revising the portfolio compositions. There are three basic policies
with respect to portfolio rebalancing.

By and hold policy,

Constant asset mix, and

Portfolio insurance policy.

Portfolio upgrading.

While portfolio rebalancing involves shifting from stocks to bonds or vice versa, it calls for
reassessing the risk return characteristics of various securities, selling over priced
securities and buying under priced securities. It may also involve the other changes the
investor may consider necessary to enhance the performance of portfolio
Portfolio evaluation

The performance of the portfolio should be evaluated periodically. The key dimensions of a

portfolio performance evaluation are risk and return and the key issue is whether the portfolio

return is commensurate with its risk exposure. Such a review may provide useful to improve the

quality of portfolio management process on a continuing basis.

For evaluating the performance of a portfolio it is necessary to consider both risk and

return. The following are the models for evaluating performance of a portfolio.

a) Treynor Measure.

b) Sharpe measure.

c) Jensen measure.
 Investment Decisions

Definition of investment

According to F. Amling “Investment may be defined as the purchase by an

individual or institutional investor of a financial or real asset that produces a return proportional
to the risk assumed over some future investment period”.

According to D.E. Fisher and R.J. Jordan, “investment is a commitment of funds

made in the expectation of some positive rate of return. If the investment is properly undertaken,
the return will be commensurate with the risk the investor assumes”.

Concept of investment

Investment will be generally be used in its financial sense and as such investment is an
allocation of monetary resources to assets that are expected to yield some gain or positive return
over a given period of time. Investment is a commitment of person’s funds to drive future
income in the form of interest, dividends rent, premiums, pension benefits or the appreciation of
the value of his principle capital

Any Investors would like to know the media or range of investment so that he can use his
discretion and save in those investments, which will give him both security and stable return.
The ultimate objective of the investor is to derive a variety of investments that meets his
preference for risk and expected return. The investor will select the portfolio, which will
maximize his utility. Another important consideration is the temperament and psychology of the
investor. It is not only the construction of a portfolio that will promise the highest expected
return, but it is the satisfaction of the need of the investor.
 Many types of investment media or channels for making investment are available.
Securities ranging from risk free instruments to highly speculative shares and debentures are
available for alternative investments.

All investments are risky, as the investor parts with his money. An efficient investor with
proper training, can reduce the risk and maximize returns, he can avoid pitfalls and protect his
interests.

There are different methods of classifying the investment avenues. A physical, if savings
are used to acquire physical assets, useful for consumption or production. Some physical assets
like ploughs, tractors or harvesters are useful in agriculture production. A few useful physical
assets like cars, jeeps etc., are useful in business. Among different types of investments some are
marketable and transferable and other are not. Example of marketable assets are shares and
debentures of public ltd companies particularly the listed companies on stock exchange, bonds of
P.S.U. Government securities etc. non marketable securities of investments are bank deposits,
provident and pension funds, insurance certificates, company deposits, private Ltd Company
shares etc.,

Investment process

The investment process may be described in the following stages.

1. Investment Policy: The first state determines and involves personal financial affairs and
objectives before making investment. It can also be called the preparation of the
investment policy stage. The investor has to see that he should be able to create an
emergency fund, an element of liquidity and quick convertibility of securities into cash.
This stage may, therefore, be called the proper time for identifying investment assets and
considering the various features of investment.
2. Investment Analysis: After arranging a logical order of type of investment preferred, the
next step is to analyze the securities available for kind of securities etc. the primary
concerns at this stage would be to form beliefs regarding future behavior of prices and
stocks, the expected return and associated risks.
3. Investment Valuation: Investment value, in general is taken to be the present worth to
the owners of future benefits from investments. The investor has to bear in mind the
value of these investments. An appropriate set of weights have to be applied with the use
of forecasted benefits to estimate the value of investment assets such as stocks,
debentures and bonds and other assets. Comparison of the value with the current market
price of the asset allows a determination of the relative attractiveness of the asset must be
valued on its individual merit.
4. Portfolio Construction and Feedback: Portfolio construction required a knowledge of
the different aspects of securities in relation to safety and growth of principal, liquidity of
assets etc, in this stage, we study determination of diversification level, consideration of
investment timing, selection of investment assets, allocation of ingestible wealth to
different investment, evaluation of portfolio feedback.

Investment Decisions – guidelines for the equity investment

 Equity shares are characterized by price fluctuations, which can produce substantial gains
or inflict severe losses. Given the volatility and dynamism of the stock market, investor requires
greater competence and skill along with a touch of good luck to invest in equity shares. Here are
some general guidelines to play equity game, irrespective whether you are aggressive or
conservative.

 Adopt a suitable formula plan

 Establish value anchors.

 Assess market psychology

 Combine fundamental and technical analysis.

 Diversify sensibly

 Periodically review and revise your revise portfolio.

Requirement of portfolio
 1. Maintain adequate diversification when relative values various securities in the
portfolio change.
2. Incorporate new information relevant for risk return assessment.
3. Expand or contract the size of portfolio to absorb funds or withdraw funds and,
4. Reflect changes in investor risk disposition.

Factors influencing investors decision and type of investors

THERE ARE FOUR TYPES OF INVESTORS IN A MARKET, THEY ARE AS

FOLLOWS:

Types of Investors:

Type A Investors: No market timing and no stock picking skills.

If the investor does not believe that he has any special skills in picking undervalued
stocks or in predicting the movement of the market, then the portfolio design problem becomes
relatively simple. The investor simply chooses a diversified portfolio and then adjusts its beta to
the desired level. If he weights the chosen security in proportion to the market capitalization, he
can expect to get a portfolio beta close to one. To achieve a higher or lower beta, he can shift the
weights towards high or low beta stocks. He can achieve the same effects by increasing or
decreasing the allocation to the equity portfolio in the overall portfolio.

The type A investor would hold a passive, diversified portfolio with the constant beta equal to
the target beta. He may also prefer to invest his money in a mutual fund and let it do the portfolio
management for him.

Type B Investor: Only stock-picking skills

 An investor who has and wishes to exploit his stock picking skills should start with a base
portfolio to that of type A investor. He should then adjust the weights of the stocks, which are in
his opinion mispriced. Specifically, he should overweight the stocks that are over valued and
underweighted those which are under value. For example, the base portfolio may have 2% in
stock X and 1.5% in stock Y. the investor who finds X under valued and Y over valued may
change the weights to 3% to X, he may have a portfolio. This may not be legally or practically
possible. The investor than has to raise the weight X to 4%, eliminate Y from the portfolio and
reduce the weight of some other stocks by 0.5%.

The investor can deal with this problem in a slightly different manner. He can put, say
90% of his equity investment in the diversified portfolio and reserve the remaining 10% for the
mispriced stocks. How large a fraction he should devote to mispriced scripts depends on how
good analyst may choose a larger fraction. What we are doing in this decision is to balance to
profit potential of investing is undervalued stocks against the benefits of diversification. Unless
we are confident about our analysis, we should give privacy to the need for diversification.

Since the average beta of the undervalued and overvalued stocks is likely to be closed to one, the
overall beta is likely to remain close to the target value, unless the target beta is substantially
different from one and the percentage of the portfolio devoted to mispriced stocks is large. If, for
some reason, this is not so, the investor would have to take future action to maintain to the beta
at the largest value. The portfolio of the type B investor is concentrated but has a constant beta.

Type C Investor: Only market – timing skills

The type C investor holds a well-diversified portfolio but switches actively between
defensive and offensive portfolios to take advantage of the market timing. If the expects the
market to rise, he should push his portfolio beta above his target level by any of the techniques
described in the section on market timing. The converse should be done if the investor is bearish
about the market. In either case, the portfolio would remain diversified all through. The portfolio
of this investor diversified, but its beta is managed and not constant.
Type D Investor: Both stock picking and market timing skills

This type of investor would use the techniques used by both the type B and type C
investor. These investors would have the most active and aggressive portfolio management
strategies. Using their superior ability to predict boom and busts in the markets as a whole and
their skills in identifying undervalued scrips, they should hold highly concentrated portfolios and
let the beta fluctuate quiet sharply around the long run target value.

A pitfall be a very strenuously avoided is that of assuming that one has a skill, which one
in reality does not have. For example, an investor who does not have very good abilities in script
selection may still think that he does not have suck stills. He would then end up with an ill-
diversified portfolio, which earns mediocre returns: he would have been better off with a passive
portfolio.

Qualities for successful investing

 Contrary thinking

 Patience

 Composure

 Flexibility and
  Openness

Discounted cash flow (DCF) method of time adjusted technique

An important technique used by Karvy Stock Broking Limited for evaluating their shares for
trading purpose. The discounted cash flow technique is an improvement on the pay-back period
method. It takes into account both the interest factor as well as the return after pay-back period.
The method involves three stages:

1. Calculation of cash flow, i.e. both inflows and out flows (preferable after tax) over the
full life of the asset.
2. Discounting the cash flow so calculated by a discount factor.
3. Aggregating of discounted cash inflows and out comparing the total with discounted cash out
flow

Discounted cash flow thus recognizes that Re1 of day (the cash out flow) is worth more than Re1
received at a future date (cash inflow). Discounted cash flow method s for evaluating capital
investment proposal is of three types as explained below:
(a) NPV method.
(b) Excess present value index.
(c) Internal rate of return.

(a) The net present value (NPV) method:

In this method cash inflow and cash outflows associated with each project are first
worked out. The present value pt these cash inflows and outflows are then calculated at the rate
of return acceptable to the management. This rate of return is considered as the cut-off rate and is
generally determined on the basis of cost of capital suitable adjusted to allow for the risk element
involved in the project. Cost outflows represent the investment and commitments of cash in the
project at various point of time. The working capital is taken as a cash outflow in the year the
project starts. Commercial production profit after tax but before depreciation represents cash
inflow. Thee Net Present Value (NPV) is the difference between the total present value of future
cash inflows and the total present value of future cash outflows.

(b) Excess present value index:

This is refinement of the net present value index method. Instead of working out the
net present value, a present index is found out by comparing the total of present value of future
cash inflows and the total of the present value of future cash outflows.

(c) Internal Rate of Return:

IRR is that at which the sum of discounted cash inflows equals the sun of discounted
cash outflows. In other words, it is the rate which discounts their dash flows to zero. It can be
started in the form of a ratio as follows.

Cash inflows
Cash outflows =1
As for the technique followed shows only for the present value or an limited time period where
as the technique followed in analysis for portfolio building takes into account all he long term
capital gains.

Industry profile

Bombay Stock Exchange (BSE)

About the Bombay Stock Exchange

Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich heritage.
Popularly known as "BSE", it was established as "The Native Share Stock Brokers Association"
in 1875. It is the first stock exchange in the country to obtain permanent recognition in 1956
from the Government of India under the Securities Contracts (Regulation) Act, 1956.The
Exchange's pivotal and pre-eminent role in the development of the Indian capital market is
widely recognized and its index, SENSEX, is tracked worldwide. Earlier an Association of
Persons (AOP), the Exchange is now a demutualised and corporative entity incorporated under
the provisions of the Companies Act, 1956,

BSE(Corporatisation and Demutualization) Scheme, 2005 notified by the Securities and

Exchange Board of India (SEBI).
With demutualization, the trading rights and ownership rights have been de-linked effectively
addressing concerns regarding perceived and real conflicts of interest. The Exchange is
professionally managed under the overall direction of the Board of Directors. The Board
comprises eminent professionals, representatives of Trading Members and the Managing
Director of the Exchange. The Board is inclusive and is designed to benefit from the
participation of market intermediaries.

In terms of organization structure, the Board formulates larger policy issues and exercises over-
all control. The committees constituted by the Board are broad-based. The day-to-day operations
of the Exchange are managed by the Managing Director and a management team of
professionals.
The Exchange has a nation-wide reach with a presence in 417 cities and towns of India. The
systems and processes of the Exchange are designed to safeguard market integrity and enhance
transparency in operations. During the year 2004-2005, the trading volumes on the Exchange
showed robust growth.
The Exchange provides an efficient and transparent market for trading in equity, debt
instruments and derivatives. The BSE's On Line Trading System (BOLT) is a proprietary system
of the Exchange and is BS 7799-2-2002 certified. The surveillance and clearing & settlement
functions of the Exchange are ISO 9001:2000 certified.

History of the Bombay Stock Exchange:

The Bombay Stock Exchange is known as the oldest exchange in Asia. It traces its history to the
1850s, when stockbrokers would gather under banyan trees in front of Mumbai's Town Hall. The
location of these meetings changed many times, as the number of brokers constantly increased.
The group eventually moved to Dalal Street in 1874 and in 1875 became an official organization
known as 'The Native Share & Stock Brokers Association'. In 1956, the BSE became the first
stock exchange to be recognized by the Indian Government under the Securities Contracts
Regulation Act.
The Bombay Stock Exchange developed the BSE Sensex in 1986, giving the BSE a means to
measure overall performance of the exchange. In 2000 the BSE used this index to open its
derivatives market, trading Sensex futures contracts. The development of Sensex options along
with equity derivatives
Followed in 2001 and 2002, expanding the BSE's trading platform.
Historically an open-cry floor trading exchange, the Bombay Stock Exchange switched to an
electronic trading system in 1995. It took the exchange only fifty days to make this transition.
NATIONAL STOCK EXCHANGE OF INDIA LIMITED

INTRODUCTION:

The Organization

The National Stock Exchange of India Limited has genesis in the report of the High Powered
Study Group on Establishment of New Stock Exchanges, which recommended promotion of a
National Stock Exchange by financial institutions (FIs) to provide access to investors from all
across the country on an equal footing. Based on the recommendations, NSE was promoted by
leading Financial Institutions at the behest of the Government of India and was incorporated in
November 1992 as a tax-paying company unlike other stock exchanges in the country.
On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in
April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June
1994. The Capital Market (Equities) segment commenced operations in November 1994 and
operations in Derivatives segment commenced in June 2000.

The National Stock Exchange of India Ltd. is the largest stock exchange of the country. NSE is
setting the agenda for change in the securities markets in India. The last 5 years have seen us
play a major role in bringing investors from 363 cities and towns online, ensuring complete
transparency, introducing financial guarantee of settlements, ensuring scientifically designed and
professionally managed indices and by nurturing the dematerialization effort across the country.

NSE is a complete capital market prime mover. Its wholly-owned subsidiaries, National
Securities Clearing Corporation Ltd. (NSCCL) provides clearing and settlement of securities,
India Index Services and Products Ltd. (IISL) provides indices and index services with a
consulting and licensing agreement with Standard & Poor's (S&P), and NSE.IT Ltd. forms the
technology strength that NSE works on.

Today, we are one of the largest exchanges in the world and still forging ahead. At NSE, we are
constantly working towards creating a more transparent, vibrant & innovative capital market.
This invariably implies that our need for competent people is continuous. As the leading stock
exchange and fiscal entity in the country, we believe in recruiting the finest of talent in the
industry.

We are looking for talent to be developed into future leaders of our organization by cross-
departmental exposure, continuous self-development opportunities and ongoing reinforcement to
develop & enhance customer orientation & leadership potential.
Awaiting you is an excellent compensation package including medical benefits, super-annuation
benefits and a reward system designed to promote merit and professionalism

Our Technology

Across the globe, developments in information, communication and network technologies have
created paradigm shifts in the securities market operations. Technology has enabled
organizations to build new sources of competitive advantage, bring about innovations in products
and services, and to provide for new business opportunities. Stock exchanges all over the world
have realized the potential of IT and have moved over to electronic trading systems, which are
cheaper, have wider reach and provide a better mechanism for trade and post trade execution.
NSE believes that technology will continue to provide the necessary impetus for the organization
to retain its competitive edge and ensure timeliness and satisfaction in customer service. In
recognition of the fact that technology will continue to redefine the shape of the securities
industry, NSE stresses on innovation and sustained investment in technology to remain ahead of
competition. NSE's IT set-up is the largest by any company in India. It uses satellite
communication technology to energize participation from around 320 cities spread all over the
country. In the recent past, capacity enhancement measures were taken up in regard to the
trading systems so as to effectively meet the requirements of increased users and associated
trading loads. With up gradation of trading hardware, NSE can handle up to 6 million trades per
day in Capital Market segment. In order to capitalize on in-house expertise in technology, NSE
set up a separate company, NSE.IT, in October 1999. This is expected to provide a platform for
taking up new IT assignments both within and outside India and attaining global exposure.
NEAT is a state-of-the-art client server based application. At the server end, all trading
information is stored in an in-memory database to achieve minimum response time and
maximum system availability for users. The trading server software runs on a fault tolerant
STRATUS main frame computer while the client software runs under Windows onPCs.

The telecommunications network uses X.25 protocol and is the backbone of the automated
trading system. Each trading member trades on the NSE with other members through a PC
located in the trading member's office, anywhere in India. The trading members on the various
market segments such as CM / F&O , WDM are linked to the central computer at the NSE
through dedicated 64Kbps leased lines and VSAT terminals. The Exchange uses powerful RISC
-based UNIX servers, procured from Digital and HP for the back office processing. The latest
software platforms like ORACLE 7 RDBMS, GUPTA - SQL/ORACLE FORMS 4.5 Front -
Ends, etc. have been used for the Exchange applications. The Exchange currently manages its
data centre operations, system and database administration, design and development of in-house
systems and design and implementation of telecommunication solutions.

NSE is one of the largest interactive VSAT based stock exchanges in the world. Today it
supports more than 3000 VSATs. The NSE- network is the largest private wide area network in
the country and the first extended C- Band VSAT network in the world. Currently more than
9000 users are trading on the real time-online NSE application. There are over 15 large computer
systems which include non-stop fault-tolerant computers and high end UNIX servers, operational
under one roof to support the NSE applications. This coupled with the nation wide VSAT
network makes NSE the country's largest Information Technology user.

In an ongoing effort to improve NSE's infrastructure, a corporate network has been implemented,
connecting all the offices at Mumbai, Delhi, Calcutta and Chennai. This corporate network
enables speedy inter-office communications and data and voice connectivity between offices.
Careers with Us
The National Stock Exchange of India Ltd. is the largest stock exchange of the country. NSE is
setting the agenda for change in the securities markets in India. The last 5 years have seen us
play a major role in bringing investors from 363 cities and towns online, ensuring complete
transparency, introducing financial guarantee of settlements, ensuring scientifically designed and
professionally managed indices and by nurturing the dematerialization effort across the country.

NSE is a complete capital market prime mover. Its wholly-owned subsidiaries, National
Securities Clearing Corporation Ltd. (NSCCL) provides clearing and settlement of securities,
India Index Services and Products Ltd. (IISL) provides indices and index services with a
consulting and licensing agreement with Standard & Poor's (S&P), and NSE.IT Ltd. forms the
technology strength that NSE works on.

Today, we are one of the largest exchanges in the world and still forging ahead. At NSE, we are
constantly working towards creating a more transparent, vibrant & innovative capital market.
This invariably implies that our need for competent people is continuous. As the leading stock
exchange and fiscal entity in the country, we believe in recruiting the finest of talent in the
industry.
We are looking for talent to be developed into future leaders of our organisation by cross-
departmental exposure, continuous self-development opportunities and ongoing reinforcement to
develop & enhance customer orientation & leadership potential.

Awaiting you is an excellent compensation package including medical benefits, super-annuation

benefits and a reward system designed to promote merit and professionalism.

Trading

NSE introduced for the first time in India, fully automated screen based trading. It uses a
modern, fully computerized trading system designed to offer investors across the length and
breadth of the country a safe and easy way to invest.

The NSE trading system called 'National Exchange for Automated Trading' (NEAT) is a fully
automated screen based trading system, which adopts the principle of an order driven market.

Risk Management

A sound risk management system is integral to an efficient clearing and settlement system. NSE
introduced for the first time in India, risk containment measures that were common
internationally but were absent from the Indian securities markets.

NSCCL has put in place a comprehensive risk management system, which is constantly
upgraded to pre-empt market failures. The Clearing Corporation ensures that trading member
obligations are commensurate with their networth.

Risk containment measures include capital adequacy requirements of members, monitoring of

member performance and track record, stringent margin requirements, position limits based on
capital, online monitoring of member positions and automatic disablement from trading when
limits are breached, etc.

Market Updates

IISL provides to specialized clients facts and figures, reports and equity market updates on
regularintervals.Thisisapaidservice.

Listing

NSE plays an important role in helping an Indian companies access equity capital, by providing
a liquid and well-regulated market. NSE has about 1016 companies listed representing the
length, breadth and diversity of the Indian economy which includes from hi-tech to heavy
industry, software, refinery, public sector units, infrastructure, and financial services. Listing on
NSE raises a company’s profile among investors in India and abroad. Trade data is distributed
worldwide through various news-vending agencies. More importantly, each and every NSE
listed company is required to satisfy stringent financial, public distribution and management
requirements. High listing standards foster investor confidence and also bring credibility into the
markets.
 PROFILE OF THE COMPANY

RELIGARE ENTERPRISE LIMITED

Religare Enterprises Limited (REL), is one of the leading integrated financial services groups of
India. REL's businesses are broadly clubbed across three key verticals, the Retail, Institutional
and Wealth spectrums, catering to a diverse and wide base of clients.

The vision is to build Religare as a globally trusted brand in the financial services domain and
present it as the 'Investment Gateway of India'. All employees of the group guided by an
experienced and professional management team are committed to providing financial care,
backed by the core values of diligence and transparency.

REL offers a multitude of investment options and a diverse bouquet of financial services with its
pan India reach in more than 1550 locations across more than 460 cities and towns. REL also
currently operates from 10 countries globally following its acquisition of London's oldest
brokerage & investment firm, Hichens, Harrison & Co. plc.

With a view to expand, diversify and introduce offerings benchmarked against global best
practices, Religare operates its Life Insurance business in partnership with the global major –
Aegon. For its wealth management business, Religare has partnered with Australia based
financial services major-Macquarie. Religare has also partnered with Vistaar Entertainment to
launch India's first SEBI approved Film Fund offering a unique alternative asset class of
investments
 VISION AND MISSION

Vision - To build Religare as a globally trusted brand in the financial services domain and
present it as the ‘Investment Gateway of India'.

Mission - Providing complete financial care driven by the core values of diligence and
transparency.

Brand Essence - Core brand essence is Diligence and Religare is driven by ethical and dynamic
processes for wealth creation.

Religare Enterprises Limited

GROUP STRUCTURE

Religare Securities Limited Religare Finvest Limited

 Equity Broking  Lending and Distribution business
 Online Investment Portal  Proposed Custodial business
 Portfolio Management Services
 Depository Services Religare Insurance Broking Limited
 Life Insurance
Religare Commodities Limited  General Insurance
 Commodity Broking  Reinsurance

Religare Capital Markets Limited Religare Arts Initiative Limited

  Investment Banking  Business of Art
 Proposed Institutional Broking  Gallery launched - arts-i

Religare Realty Limited Religare Venture Capital Limited

 In house Real Estate Management Company  Private Equity and Investment Manager

Religare Hichens Harrison** Religare Asset Management*

 Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited
(RSL), which in turn is a 100% subsidiary of Religare Enterprises Limited.

* Religare Hichens, Harrison plc. (RHH) is a part of Religare Enterprises Limited (REL) – a leading integrated financial
ervices group of India. Hichens, Harrison & Co. plc. (HH), established in 1803 is London’s oldest brokerage and
nvestment firm with a global footprint. Post its acquisition through REL’s indirect subsidiary - Religare Capital Markets
nternational (UK) Limited, HH has been rechristened as Religare Hichens Harrison plc.

Name

Religare is a Latin word that translates as 'to bind together'. This name has been chosen to reflect
the integrated nature of the financial services the company offers.

Symbol

The Religare name is paired with the symbol of a four-leaf clover. Traditionally, it is considered
good fortune to find a four-leaf clover as there is only one four-leaf clover for every 10,000
three-leaf clovers found.
For us, each leaf of the clover has a special meaning. It is a symbol of Hope. Trust. Care. Good
Fortune.

For the world, it is the symbol of Religare.

The first leaf of the clover represents Hope. The aspirations to succeed. The dream of becoming.
Of new possibilities. It is the beginning of every step and the foundation on which a person
reaches for the stars.

The second leaf of the clover represents Trust. The ability to place one’s own faith in another. To
have a relationship as partners in a team. To accomplish a given goal with the balance that brings
satisfaction to all, not in the binding, but in the bond that is built.

The third leaf of the clover represents Care. The secret ingredient that is the cement in every
relationship. The truth of feeling that underlines sincerity and the triumph of diligence in every
aspect. From it springs true warmth of service and the ability to adapt to evolving environments
with consideration to all.

The fourth and final leaf of the clover represents Good Fortune. Signifying that rare ability to
meld opportunity and planning with circumstance to generate those often looked for
remunerative moments of success.

Hope. Trust. Care. Good Fortune. All elements perfectly combine in the emblematic and rare,
four-leaf clover to visually symbolize the values that bind together and form the core of the
Religare vision.

OTHER GROUP COMPANIES

Fortis Healthcare Limited, established in 1996 was founded on the vision of creating an

integrated healthcare delivery system. With 22 hospitals in India, including multi-specialty &
super specialty centers, the management is aggressively working towards taking this number to a
significant level in the next few years to provide quality healthcare facilities and services across
the nation.
For more information log on to: http://www.fortishealthcare.com

Super Religare Laboratories Limited (formerly SRL Ranbaxy) within 11 years of inception

has become the largest Pathological Laboratory network in South Asia. It started a revolution in
diagnostic services in India by ushering in the most specialized technologies, backed by
innovation and diligence. The current footprint extends well beyond India in the Middle East and
parts of Europe.
For more information log on to: http://www.srl.in

Religare Wellness Limited (formerly Fortis Health world) is one of the leading players in the
wellness retail space with a footprint of over 100 stores across India. The group envisages setting
up a pan India world class retail network of wellness stores that would provide comprehensive
solutions under one roof.
For more information log on to: http://www.religarewellness.com

Religare Technova Limited is the holding company for global IT business of the promoter
group, offering Enterprise IT Solutions, Knowledge Management Solutions and software
products and services. Currently with over 1500 employees and presence in over 10 countries,
Religare Technova is poised to be a leader in the global IT space.
For more information log on to: http://www.religaretechnova.com

Religare Voyages Limited is the holding company for the promoter group’s integrated aviation
and travel businesses. The Air Charter business is one of the largest in the non-scheduled space
in the country with its own top-of-the-line fleet that comprises jets, helicopters and turbo props.
The travel business is duly accredited for complete management of both in-bound and out-bound
domestic and international travel.
For more information log on to: http://www.religarevoyages.com
CENTRAL LEADERSHIP TEAM

 Mr. Sunil Godhwani

Managing Director & Group CEO, Religare Enterprises Limited

 Mr. Shachindra Nath 

Group Chief Operating Officer, Religare Enterprises Limited

 Mr. Anil Saxena

Group Chief Finance Officer, Religare Enterprises Limited

Board of Directors - Religare Enterprises Limited

 Mr. Malvinder Mohan Singh

Non Executive Chairman

 Mr. Sunil Godhwani

Managing Director & Group CEO

 Mr. Shivinder Mohan Singh

Non Executive Director
  Mr. Harpal Singh
Non Executive Director

 Mr. Deepak Ramchand Sabnani

Independent Director
 Mr. Padam Bahl
Independent Director

 Mr. J. W. Balani
Independent Director

 Ms. Sunita Naidoo

Independent Director

 Mr. R. K. Shetty 
Alternate to Mr. J. W. Balani

 Capt. G. P. S. Bhalla
Alternate to Mr. Deepak Sabnani

GLOBAL NETWORK

Religare Hichens, Harrison plc. (RHH) is a part of Religare Enterprises Limited (REL) – a
leading integrated financial services group of India. Hichens, Harrison & Co. plc. (HH),
established in 1803 is London’s oldest brokerage and investment firm with a global footprint.
Post its acquisition through REL’s indirect subsidiary - Religare Capital Markets International
(UK) Limited, HH has been rechristened as Religare Hichens Harrison plc.

Further, powered by this acquisition and seamless integration, the group now envisions
establishing RHH as a globally scalable business of excellence. RHH intends to introduce an
improved array of investment products backed by innovation and broaden its reach across
several other geographies.

RHH is an authorized and regulated broker for companies traded on the AIM Market, a PLUS
member broker-dealer, a PLUS member corporate adviser and a member of the Dubai
International Financial Exchange.

Currently, the principal areas of activity for RHH are - private client stock broking, institutional
broking and sales, corporate broking, corporate finance and contracts for differences.

Religare Securities Limited

Religare Securities Limited (RSL), a 100% subsidiary of Religare Enterprises Limited is a

leading equity and securities firm in India. The company currently handles sizeable volumes
traded on NSE and in the realm of online trading and investments; it currently holds a reasonable
share of the market. The major activities and offerings of the company today are Equity Broking,
Depository Participant Services, Portfolio Management Services, International Advisory Fund
Management Services, Institutional Broking and Research Services. To broaden the gamut of
services offered to its investors, the company offers an online investment portal armed with a
host of revolutionary features.

 RSL is a member of the National Stock Exchange of India, Bombay Stock Exchange of
India, Depository Participant with National Securities Depository Limited and Central
Depository Services (I) Limited, and is a SEBI approved Portfolio Manager.
 Religare has been constantly innovating in terms of product and services and to offer
such incisive services to specific user segments it has also started the NRI, FII, HNI and
Corporate Servicing groups. These groups take all the portfolio investment decisions
depending upon a client’s risk / return parameter.

Religare has a very credible Research and Analysis division, which not only caters to the need of
our Institutional clientele, but also gives their valuable inputs to investment dealers.
EQUITY AND DERIVATIVES

Trading in Equities with Religare truly empowers you for your investment needs. We ensure you
have a superlative trading experience through -

 A highly process driven, diligent approach

 Powerful Research & Analytics and
 One of the “best-in-class” dealing rooms

Further, Religare also has one of the largest retail networks, with its presence in more than 1550
locations across more than 460 cities and towns. This means, you can walk into any of these
branches and connect to our highly skilled and dedicated relationship managers to get the best
services.

The Religare Edge

 Pan India footprint

 Powerful research and analytics supported by a pool of highly skilled
research analysts
 Ethical business practices
 Offline/Online delivery models
 Single window for all investment needs through your unique CRN
Portfolio Management Services (PMS)

Religare offers PMS to address varying investment preferences. As a focused service, PMS pays
attention to details, and portfolios are customized to suit the unique requirements of investors.

Religare PMS currently extends six portfolio management schemes, viz Monarque, Panther,
Tortoise, Elephant, Caterpillar and Leo. Each scheme is designed keeping in mind the varying
tastes, objectives and risk tolerance of our investors

Our Schemes

Monarque 

At Religare, we understand ‘those who reign’ have truly inimitable needs and objectives and
deserve an equivalently matchless partner to provide your wealth the care it deserves to grow and
be preserved. Monarque is a portfolio structured to provide higher returns by taking aggressive
positions across sectors and market capitalizations. Monarque is ideally suitable for investors
with "High Risk High Return" appetite.

Panther

The Panther portfolio aims to achieve higher returns by taking aggressive positions across
sectors and market capitalizations. It is suitable for the “High Risk High Return” investor with a
strategy to invest across sectors and take advantage of various market conditions.

Tortoise

The Tortoise portfolio aims to achieve growth in the portfolio value over a period of time by way
of careful and judicious investment in fundamentally sound companies having good prospects.
The scheme is suitable for the “Medium Risk Medium Return” investor with a strategy to invest
in companies which have consistency in earnings, growth and financial performance.

Elephant
The Elephant portfolio aims to generate steady returns over a longer period by investing in
Securities selected only from BSE 100 and NSE 100 index. This plan is suitable for the “Low
Risk Low Return” investor with a strategy to invest in blue chip companies, as these companies
have steady performance and reduce liquidity risk in the market.

Caterpillar

The Caterpillar portfolio aims to achieve capital appreciation over a long period of time by
investing in a diversified portfolio. This scheme is suitable for investors with a high risk appetite.
The investment strategy would be to invest in scrips which are poised to get a re-rating either
because of change in business, potential fancy for a particular sector in the coming years/months,
business diversification leading to a better operating performance, stocks in their early stages of
an upturn or for those which are in sectors currently ignored by the market.

Leo

Leo is aimed at retail customers and structured to provide medium to long-term capital
appreciation by investing in stocks across the market capitalization range. This scheme is a mix
of moderate and aggressive investment strategies. Its aim is to have a balanced portfolio
comprising selected investments from both Tortoise and Panther. Exposure to Derivatives is
taken within permissible regulatory limits.

The Religare Edge

We serve you with a diligent, transparent & process driven approach and ensure that your money
gets the care it deserves.

No experts, only expertise. PMS brought to you by Religare with its solid reputation of an
ethical and scientific approach to financial management. While we offer you the services of a
dedicated Relationship Manager who is at your service 24x7, we do not depend on individual
expertise alone. For you, this means lower risk, higher dependability and unhindered continuity.
Moreover, you are not limited by a particular individual’s investment style.
No hidden profits. We ensure that a part of the broking at Religare Portfolio Management
Services is through external broking houses. This means that your portfolio is not churned
needlessly. Using more broking firms gives us access to a larger number of reports and analysis,
enabling us to make better, more informed decisions. Furthermore, your portfolio is customized
to suit your investment objectives.

Daily disclosures. Religare Portfolio Management Services gives you daily updates on your
investment. You can pinpoint where your money is being invested, 24x7, instead of waiting till
the end of the month to keep track.

No charge till you profit*.So sure are we of our approach to Portfolio Management that we do
not charge you for our services, until your investments start showing profit. With customized
investment options Religare Portfolio Management Services invites you to invest across five
broad portfolios to suit your investment needs.

International Advisory Fund Management Services

Investing in international markets opens avenues for relatively stable investments and
diversification.

We at Religare provide our clients an opportunity to invest in international equities to scale up

investment horizons and to enable them to gain from profits of global majors. An asset allocation
module is developed based on the risk-return criteria of the investor and on country
attractiveness, sector and industry strength, company strengths and global trends.

The portfolio then comprises of growth, value and momentum stocks. This stock based portfolio
with long-short combination is designed to benefit from any market conditions covering credit,
currency and transaction risks.
Currency Futures

Now, experience the excitement of the world's most traded financial instrument with Religare.

Benefits of Currency Futures

 High Liquidity
 Extended trading hours - 9 am to 5 pm
 Opportunities to reap benefits owing to a highly dynamic market
 Small lot size of only US $1000 with low exchange specified margins

Currency Futures is best suited for -

 NRIs involved in remitting money into India

 SMEs / Individuals involved in Imports/Exports
Corporate/ Institutions involved in Imports/Exports and anybody else who has foreign currency
exposure

Institutional Broking Services

With the mission to institutionalize and implement a process driven approach, the Institutional
Broking Services at Religare cater to the investment needs of leading corporate houses and
institutions. Backed by incisive research, this division would like to be seen as a one stop
investment gateway and knowledge repository for its clients, servicing their unique and
sophisticated needs.
Our Institutional Broking desk is currently dealing with almost all the leading client groups, like
Mutual Funds, FIIs, Banks and Insurance Companies.

The Religare Edge:

 Highly skilled, dedicated dealing, research and sales teams

 Dealing capabilities on the NSE, BSE and in the cash and derivatives segment
 In-depth, detailed and insightful coverage across 16 diverse sectors and 153 companies
that extends to
o Economic Research
o Result Expectations
o Derivative Strategies
o IPO Research
o Mutual Fund Research
o Special reports like impact of credit policy, budget, etc.
 Access to international expertise and global practices established in mature financial
markets
 An international distribution network servicing the needs of institutions & corporate
houses through a large global network and with the ability to execute globally