Download - Niyati Gandhi 1621 Final Report
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A SUMMER TRAINING PROJECT REPORT
ON
STUDY AND EVALUATION OF BANKING PRODUCTS AND
BASIC CONCEPTS OF ONLINE TRADING OF SHARES
AT
KOTAK MAHINDRA BANK Ltd.
Kotak house, Surat
SUBMITTED IN PARTIAL FULFILMENT OF THE
REQUIREMENT
OFPOST GRADUATE DIPLOMA IN MANAGEMENT
(Approved by AICTE, Government of India)ACADEMIC SESSION 2012-2014
Institute for Technology and Management
Under the Kind Guidance of
Industry Guide:- Faculty Guide:
Ms. Jignesh Raval Prof. B.V.R.Murty(Branch Sales Manager) Deputy Director, ITM GLC
Submitted by
Niyati Gandhi
PGDM -1621
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ACKNOWLEDGEMENT
Its a privilege to be associated with Kotak Mahindra Bank Limited, a Kotak
Group of companies which has emerged as one of the leading financial
conglomerates.
I articulate my sincere gratitude to my project guide Mr. Jignesh Raval (Branch
Sales Manager), who has spend his valuable time and guided me throughout the
training process in spite of his busy schedule, in shaping my project as well as
providing necessary information regarding the project and also for his support in
completing the project.
I am very grateful to thank the employees of the kotak Mahindra bank ltd. who
have been the source of constant inspiration and sharing valuable suggestions
during my banking hours.
I would also like to thank to my Faculty Guide Prof. B.V.R.Murty, DeputyDirector, ITM Navi Mumbai, who helped me by giving necessary feedback
required for my project work.
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DECLARATION
I, NIYATI GANDHI to the best of my knowledge and belief, hereby declare that
the project report entitled STUDY AND EVALUATION OF BANKING
PRODUCTS AND BASIC CONCEPTS OF ONLINE TRADING OF SHARES
is a result of my own work, all facts studied and evaluated presented in this report
are prepared by me in the fulfillment of academic requirement. The training is
done in Kotak Mahindra Bank Limited, K G Point, Kotak House, Surat-395007,
Gujarat for a period of five months, commencing from 2nd January 2013 to 7th
June 2013.
This project work is submitted to Institute for Technology and Management, Navi
Mumbai as well as in Kotak Mahindra Bank Limited. It is not to be used or copied
by any person. Written order has to be taken from appropriate authority.
DATE: Signature
Niyati R.Gandhi
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INDEX
SR.NO. PARTICULARS PAGE NO.
ACKNOWLEDGEMENT
DECLARATION
1 EXECUTIVE SUMMARY 1
2 RESEARCH METHADOLOGY 3
3 INTRODUCTION TO MY PROJECT 5
4 OBJECTIVE OF THE STUDY 5
5 SCOPE OF THE STUDY 6
6 LIMITATIONS OF THE STUDY 6
7 AN OVERVIEW OF KOTAK MAHINDRA BANK 8
8 COMPANY PROFILE 12
9 KOTAKS PRODUCT DETAIL 18
10 INVETSMENT SERVICES 31
11 CONVENIENCE BANKING 37
12 STRATEGIC ALLIANCES 43
13 FINANCIAL OVERVIEW 47
14 INTRODUCTION TO KOTAK SECURITIES 52
15 INTRODUCTION TO CONECPTS OF TRADING 54
16 TREND LINES 65
17 CONCLUSION AND RECOMMENDATIONS 75
18 BIBLIOGRAPHY 78
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EXECUTIVE SUMMARY
The project is based on the sales strategies for the Banking products and
theoretical concepts of online trading with a special references to KOTAK
MAHINDRA BANK.
First and Foremost, the purpose of KOTAK MAHINDRA BANK is to fulfill
the needs for investment under one roof. This project shows, the common
man has started capital market term like bull and bear explode new time. It
gives the detail view of the regulatory framework for the KOTAK
MAHINDRA BANK. The focus to shift to various products of KOTAK
MAHINDRA BANK to cater to the needs such as return explanation,
financial position, etc.
Stock exchange performs activities such as trading in share, securities,
bonds, mutual fund & commodities. Stock Broking industry is growing at an
enormous rate, as more and more people are attracted towards stock
exchanges with the hope of making profits.
But during this period the country also registered a fairly high industrial
growth. The old industries and business establishments who wanted to
expand the activities as well as the new industries and the business
establishments floated shares in the market to raise capital for their
activities. The companies, which registered steady growth, earned
confidence of the people and their shares, were rated high in the market.
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This project report helps the reader to understand the techniques of investing
in the stock market particularly in the secondary market. Some of the proven
techniques have been used in this report to help the reader or investor.
Fundamental Analysis is the study of everything from the overall
economy and industry conditions, to the financial condition and
management of specific companies (i.e., using real data to evaluate a stocks
value).
Technical analysis is the examination of past price movements to
forecast future price movements. Technical analysts are sometimes referred
to as chartists because they rely almost exclusively on charts for their
analysis.
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RESEARCH METHADOLOGY
The methodology followed in this project involves the following phases:-
Methods of Collection of data
Type of the project
Interpretation and recommendation
Methods of Collection of data
The information is collected through both primary sources and secondary
sources during the project. That information was utilized for calculating
performance evaluation and based on that, interpretations were made.
Sources of Primary Data:
The sources of primary data are discussion with my company guide and
various observations.
Sources of secondary data:
Annual reports were used for the required calculations to be made, and for
various information, Draft red herring prospectus, Red herring prospectus
was also used.
Internet data, books, journals, kotak bank website, Wikipedia and various
department of bank were also looked upon.
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Analysis
The data collected laid the foundations for the study and gave a platform for
the analysis and findings which lead to the fulfillment of the objectives. The
data collection and analysis paves way for the recommendation and
conclusion of the study that reveals some important findings regarding the
strategies and policies with reference to kotak Mahindra bank Limited. For
the Financial performance analysis, Ratios analysis was used and for
fundamental and technical analysis of shares, gathered theoretical
knowledge of some basic concepts.
Conclusion and Recommendation
After completion of the entire analysis, interpretation and recommendation
were made on the basis of tables, charts and figures. Statistical tools like
Tables and Charts were used for representing of the data.
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INTRODUCTION TO MY PROJECT
I am doing my 2 year Post graduate diploma course in finance from Institute
for technology and management so as a partial fulfillment of requirement of
my summer internship, a project has been prepared on study and evaluation
of banking products and basic concepts on online trading of shares in which
financial performance of the company using various ratios has been analysed
and which CASA products are suitable for a particular category of people
have been learnt and finally gathered the theoretical knowledge on basic
concepts on online trading used during fundamental and technical analysis.
OBJECTIVE OF THE STUDY
Study of banking products gives a better knowledge of which CASA
products are suitable for a particular group of people.
Study how new distribution channels such as Internet Banking, ATM
facility, Phone Banking have changed the face of the Banking
industry.
Understand various current account products available. (Edge, Pro,
Ace)
Understand various savings account products. (Edge, Pro, Ace)
Understand various other facilities provided by the bank to customers.
To understand financial position of the company with the help of ratio
analysis.
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To understand the online share trading through various theoretical
concepts which are helpful during fundamental and technical analysis.
Understand various chart patterns used.
SCOPE OF THE STUDY
The study was done in the partial requirement of fulfillment of my
post graduate diploma in management course in finance stream. Kotak
Mahindra bank ltd.is one of the leading financial institution. The studyis based on the kotak banks product offered to the customers and
concepts of online share trading followed by kotak house and to
understand the financial performance of the company. The branches
of kotak bank follow similar practices which are outside the scope of
the study.
Study was based on published documents by kotak Mahindra bank ltd.
and other notable authorities.
LIMITATIONS OF THE STUDY
Inadequacy of required data is the main constraint. Usually banks do
not provide with financial documents as things are to be kept secret.
In such cases data is taken with certain assumption.
Dealing with customers is always the common constraint for all. To
convince for CASA products to customers was not easy.
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Time is definitely a constraint. Time was insufficient to assess all
processes and policies of an organization of KMBL.
As data is secondary, so it cannot be said to give constant conclusions,
as it is not revised to present situation.
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AN OVERVIEW OF KOTAK MAHINDRA BANK
Overview
Kotak Mahindra is one of India's leading financial institutions, offering
complete financial solutions 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 financial needs of individuals
and corporates.
The group has a net worth of over Rs. 2,900 crore, employs around 8,800
people in its various businesses and has a distribution network of branches,
franchisees, representative offices and satellite offices across 282 cities and
towns in India and offices in New York, London, Dubai and Mauritius. The
Group services around 2 million customer accounts.
THE JOURNEY SO FAR ...
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In October 2005, Kotak Group acquired the 40% stake in Kotak Prime held
by Ford Credit International (FCI) and FCI acquired the stake in Ford Credit
Kotak Mahindra (FCKM) held by Kotak Group. In May 2006, Kotak Group
bought 25% stake held by Goldman Sachs in Kotak Capital and Kotak
Securities.
Story of Kotak
The Kotak Mahindra Group was born in 1985 as Kotak Capital Management
Finance Limited. This company was promoted by Uday Kotak, Sidney A. A.
Pinto and Kotak & Company. Industrialists Harish Mahindra and Anand
Mahindra took a stake in 1986, and that's when the company changed its
name to Kotak Mahindra Finance Limited. Since then it's been a steady and
confident journey to growth and success.
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.
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1991:The Investment Banking Division is started. Takes over FICOM, one
of Indias largestfinancial retail marketing networks.
1992: Enters the Funds Syndication sector.
1995: Brokerage and Distribution businesses incorporated into a separate
companyKotak Securities. Investment Banking division incorporated into
a separate companyKotak 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 Groups 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.
2001: Matrix sold to Friday Corporation Launches Insurance Services.
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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.
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COMPANY PROFILE
Established in 1984, The Kotak Mahindra Group has long been one of
Indias most reputed financial organizations. In Feb 2003, KotakMahindra
Finance Ltd., the groups flagship company was given thelicense to carry on
banking business by the Reserve Bank of India (RBI).This approval creates
banking history since Kotak Mahindra Finance Ltd is the first company in
India to convert to a bank. The license authorizing the bank to carry on
banking business has been obtained from the RBI in tune with Section 22 of
the Banking Regulation Act 1949.
KMBL was promoted by Mr. Uday.S.Kotak, Kotak and Company Ltd and
Mr. Sidney &A.A.Pinto under the name of Kotak Capital Management
Finance Ltd on 21st Nov 1985 and obtained a Certificate of Commencement
of Business on 11th Feb 1986.
The bank customers have access to entire VISA network of 4500 ATMS in
India and 800000ATMS worldwide accepted in more than 56000
establishments across India and 10 million worldwide. The customer also
has access to over 800 ATMs with sharing arrangements with UTI BANK,
of these 125 are in the NCR.
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KOTAK stands for: -
K: Knowledge and competence
O: Offering Innovative and Proactive solutions
T: Transparent and Fair
A: Approachable and Warm to build Relationships
K: Keeping it simple for your customers to help them understand better.
Our Corporate Identity
The symbol of the Infinite Ka reflects our global Indian personality. The Ka
is uniquely Indian while its curve forms the infinity sign, which is universal.
One of the basic tenets of economics is that mans needs are unlimited. The
Infinite Ka symbolises that we have an infinite number of ways to meet
those needs.
Kotak Group Companies
Kotak Mahindra Bank
The Kotak Mahindra Groups 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 toconvert into a Bank. Its banking operations offers a central platform for
customer relationships across the groups various businesses. The bank has a
presence in the Commercial Vehicles, Retail Finance, Corporate Banking,
Treasury and Housing Finance.
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Kotak Mahindra Capital Company
Kotak Mahindra Capital Company Limited (KMCC) is India's premier
Investment Bank and a Primary Dealer (PD) approved by the RBI. KMCC's
core business areas include Equity Issuances, Mergers & Acquisitions,
Structured Finance and Advisory Services, Fixed Income Securities and
Principal Business.
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-ordinators. Kotak Securities Ltd.
offers online (through www.kotaksecurities.com) and offline services based
on well-researched expertise and financial products to the non-institutional
investors.
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
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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 (KMAMC), a subsidiary of
Kotak Mahindra Bank, is the asset manager for Kotak Mahindra Mutual
Fund (KMMF). KMMF manages funds in excess of Rs 11,000 crores 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.
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Group Structure
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KOTAKS PRODUCT DETAIL
Product Detail
Kotak Mahindra Bank is one of the prominent subsidiaries of Kotak
Mahindra group. The activities of the company being parallel to its objective
are very wide and cover all the components of a Bank. The Basic area of
Operations is the Banking business, other products are meant for the regular
revenue generation. Being a Banking house, the company is in regular touch
with Banking Accounts, Investment Services, Convenience Banking and
Other Services.
They offer complete solutions that address all your financial requirements,
whether you're an individual or a firm. From everyday banking to long term
investments their offering covers it all. This wide range of products isdelivered to you with a genuine understanding of your specific need and
warm, personalised service.
Kotak Mahindra Bank, it's not about selling you many different products
it's about working out a holistic, pragmatic solution that addresses your
financial needs. Through their varied products,they commit themselves to
becoming banker to the customer rather thanbeing asset financier to our
customers.
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Banking Accounts
There are three types of banking account:
Savings Account
Current Account
Term Deposit
SAVINGS ACCOUNT
Choose from our range of Savings Accounts
KOTAK MAHINDRA has got a variety of options of savings accounts tochoose from for its customers according to their convenience and
requirements .These savings accounts offer attractive returns along with
personalized banking services at three convenient average quarterly
balances(AQB)levels of Rs. 10000 (KOTAK EDGE SAVINGS
ACCOUNT),Rs. 20000 (KOTAK PRO SAVINGS ACCOUNT) and at
Rs75000(KOTAK ACE SAVINGS ACCOUNT).The average quarterly
balance levels as well the corresponding services and benefits try to ensure
the various customer needs and requirements.
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Thus the three account opening options in savings account are as mentioned
above:
1. EDGE SAVINGS ACCOUNT:
Kotak Mahindra Banks Edge Savings Account is a complete financial
package customized to suit individual banking needs. Its constant endeavour
is to enable regular financial transactions through online platform so that
most of payments can be made directly through your account or card.
Features & Benefits
Wide ATM access through the Kotak Mahindra Bank Debit Card
One can walk into any KOTAK or HDFC Bank ATMs to withdraw cash or
enquire balance at no extra charge!
Multiple Access Channels Access
An account through phone, mobile phone or internet to get information
about account balance or track transactions. One can even transfer funds
through Phone Banking or Net Banking.
Financial payments facilitated through the savings account
Use the free Payment Gateway to make online payments for utility bills,
credit cards, online trading of shares or even online shopping.
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Quick and easy funds transfer
Quick funds transfer to a third party account with another Bank is available
across 15 locations through Net Banking. Also get a multicity cheque book
so that money from account is received by the beneficiary in the fastest
possible time.
Free investment account
One can open an investment account, and use the Net Banking facility to
purchase/redeem mutual funds online while directly debiting / crediting your
Bank Account. Besides this you get a consolidated view of all your mutual
fund investments across schemes with updated returns status, latest NAV
information and research reports.
Attractive returns
Earn better returns in your savings account, with our 2-Way Sweep facility
that automatically sweeps out idle funds, above a threshold, from your
account into Term Deposits. These Term Deposits sweep back into your
account to meet fund requirements when your withdrawals exceed the
balance available in your account, thereby providing you maximum
liquidity.
2. PRO SAVINGS ACCOUNT:Kotak Mahindra Banks Pro Savings Account is an account packed with
powerful features to provide a superior banking experience at a very
comfortable balance requirement. They provide a relationship manager who
will specifically take care of banking and investment needs.
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Features & Benefits
Free ATM access all domestic VISA ATM network
Walk into any VISA ATM in India to check balance or withdraw cash
absolutely free. no longer have to worry about locating your Bank or Partner
Bank ATMUse the first VISA ATM that you spot, for cash withdrawal or
balance enquiry transactions.
Multiple access channels
Access your account through phone, mobile phone or internet to get
information on your account balance or track your transactions. You can
even transfer funds through Phone Banking or Net Banking.
Free investment account
One can open an investment account, and use the Net Banking facility to
purchase/redeem mutual funds online while directly debiting / crediting bank
account. Besides this get a consolidated view of all the mutual fund
investments across schemes with updated returns status, latest NAV
information and research reports.
Financial payments facilitated through the savings account
Use our free Payment Gateway to make online payments for utility bills,
credit cards, online trading of shares or even online shopping.
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Quick and easy funds transfer
Quick funds transfer to a third party account with another Bank is available
across 15 locations through Net Banking. Also get a multicity cheque book
so that money from account is received by the beneficiary in the fastest
possible time
Attractive returns
Earn better returns in your savings account, with our 2-Way Sweep facility
that automatically sweeps out idle funds, above a threshold, from your
account into Term Deposits. These Term Deposits sweep back into your
account to meet fund requirements when your withdrawals exceed the
balance available in your account, thereby providing you maximum
liquidity.
Dedicated relationship manager
You get a one point contact for all your banking related queries and
transactions. Your relationship manager will also help you with financial
planning and sound investment decisions.
Free banking transactions
You can issue demand drafts or send cheques for collection on branch
locations without any charge to your account.
3.ACE SAVINGS ACOUNT:Kotak Mahindra Bank's Ace Savings Account has been designed as a
gateway to a world of financial benefits and privileged banking transactions.
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The account carries benefits ranging from personal investment advisory
services to concierge services to free banking transactions. Onewill find that
this package of services and privileges is unmatched by any other savings
account in the market.
Features & Benefits
Free access at all domestic and international VISA ATMs
No longer have to worry about locating your Bank or Partner Bank ATM -
Use the first VISA ATM that you spot, for free cash withdrawal or balance
enquiry transactions. So walk into any VISA ATM in India or abroad to
withdraw cash or for balance enquiry.
Multiple access channels
Access the account anytime through land line, mobile phone or internet to
get information on account balance or track transactions. One can even
transfer funds through Phone Banking or Net Banking.
Financial payments facilitated through the savings account
Use the free Kotak Payment Gateway to make online payments for utility
bills, credit cards, online trading of shares or even online shopping. All this
at the click of a mouse!
Quick and easy funds transfer
Transfer funds easily and with speed, to a beneficiary account at another
bank. One can avail of this facility by walking into any of branches or by
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simple logging on to Net Banking. Also get a free multi-city cheque book so
that money from your account is transferred to the beneficiary's account at
any of branch locations, in the fastest possible time.
Free banking transactions
One can issue demand drafts or send cheques for collection at all branches
for no extra charge.
Attractive returns
Earn better returns in your savings account, with our 2-Way Sweep facility
that automatically sweeps out idle funds, above a threshold, from your
account into Term Deposits. These Term Deposits sweep back into account
to meet fund requirements when withdrawals exceed the balance available in
the account, thereby providing maximum liquidity.
CURRENT ACCOUNT
Kotak Mahindra Bank offers unparalleled advantages with its three Current
Account offerings. Whether small/ mid size business or an enterprise spread
across multiple locations in the country, would find a Current Account that's
just designed for you. These Current accounts offer attractive returns along
with personalized banking services at three convenient average quarterly
balances(AQB)levels of Rs. 25000 (KOTAK EDGE SAVINGS
ACCOUNT),Rs. 50000 (KOTAK PRO SAVINGS ACCOUNT) and at
Rs250000(KOTAK ACE SAVINGS ACCOUNT).The average quarterly
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balance levels as well the corresponding services and benefits try to ensure
the various customer needs and requirements. With features ranging from
Free DDs, Free Cheque Collection, Free At -Par Cheque facility to Free
Trading Account & free Demat Account, and more! Thus the three account
opening options in savings account are as
mentioned above:
1. Edge Current Account
In need of a well equipped bank account to keep pace in all the business
endeavors. They offer the Kotak Edge Current Account, armed with Kotak
2-Way Sweep and the entire gamut of Banking Privileges, providing that
extra edge to get ahead. The feature rich Kotak Edge Current Account is the
ideal way to make money work harder.
Features & Benefits
Multi City Banking
Current account/s with Kotak Mahindra Bank will be recognized in every
other branch. One can just walk into a Kotak Mahindra Bank branch in any
of our branches across country to satisfy all the banking needs.
2 - Way Sweep: Term Deposit linked Current Account
Kotak 2-Way Sweep ensures that money never stops working for you. Daily
balances, above a threshold level, in Current Account are automatically
swept out into Term Deposits (TD). This 'swept out amount' is brought back
into account to meet fund requirements when withdrawals exceed the
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balance available in the account (or when the account balance goes below
the specified threshold level.) With Kotak 2-Way Sweep you enjoy the twin
advantages of attractive
returns & maximum liquidity.
Free Demand Drafts and Pay Orders
Enjoy the benefit of our free Demand Drafts, payable at Kotak Mahindra
Bank Branch location in India.
At-par Cheques
Get free At-par Cheques that are treated as 'local clearing' cheques across all
branch locations. All these at nominal costs.
Cheque Collection
All Outstation cheques, drawn on any of branch locations, are collected 'at
nominal charge' for you. The strong network of correspondent banks enables
us to collect cheques from 1600 locations across India at faster speed and
minimal cost
Mobile Banking and Alerts
Our Mobile Banking & Alerts service enables to access bank account on
Mobile Phone. One can access all your standing instructions (SI), any large
credits or debits, available balance, balance below AQB, any SI failure and
SIs successfully executed will be intimated to you via SMS
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TERM DEPOSITS
Key Features
Ease and convenience of operation
Liquidity through overdraft or sweep-in facility
No penalty on pre-mature encashment
Nomination facility available
Give your portfolio stability of returns and safety and liquidity. Invest in
Kotak Bank Term Deposit. It offer attractive returns on term deposits andinvesting in them is really simple and convenient.
Features & Benefits
Ease and convenience of operation
For the first time in India, New to Bank customer can also apply online for
term deposit. An existing customer,can place a term deposit through Phone
Banking or Net Banking. What's more, one 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 branches.
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Liquidity through overdraft or sweep-in facility
Deposit will be available to you should you need them in case of an
emergency. One can avail upto 85% overdraft against term by paying 2%
above deposit rate. This facility is available for deposits above Rs.50,000 for
a tenure of 181 days or more. One can also choose to link term deposit to
savings / current account, whereby if need be, term deposit will
automatically be encashed to meet withdrawal requirement.
No penalty on pre-mature encashment
In case term deposit is pre-maturely encashed,one will earn interest at the
rate prevailing on the date of deposit for the withdrawn amount.
Nomination facility available
One can avail this facility for each & every account that open with us i.e.
nominate different persons for different term deposit accounts can choose to
change the nominee through a declaration in the appropriate form to revise
the nomination during the term of the deposit.
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INVETSMENT SERVICES
Making your money grow
At Kotak Mahindra Bank,can recognise that financial needs vary, not just
amongst individuals, but across the different stages of your life. They have
years of experience in helping people put together an investment portfolio
that works best for them.
DEMAT
Key Features
Efficient depository services that allow you to hold your shares in
convenient, "demat" formats
Leverage opportunities in the stock-market when you spot them
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It offers streamlined, efficient depository services that allow to hold shares
in the convenient "demat" formats and leverage opportunities in the stock-market when you spot them Being a brokerage house, the company is in
regular touch with the share market and its relative indexes like NSE &BSE,
NCDEX. NSDL, CSDL. Lets understandthe relative terms :
SEBI (Stock Exchange board of India)
It check out on NSE and BSE and all type of share trading (Both primary
and secondary market)
NSE &BSE
Kotak Mahindra Bank allows to costumer to trade in share with NSE and
BSE both (in primary and secondary market both). In BSE costumer can
trade in 2452 stocks and in NSE costumer can trade in 933 companies. The
index of NSE is Nifty and for BSE Sensex
NSDL AND CSDL
Kotak Mahindra Bank allow to costumer to invest in mutual fund and bonds.
NSDL (National security depository limited) and CSDL (Central security
depository limited) check out on this type of investment
MCX AND NCDEX
Kotak Mahindra Bank also allow to costumer to trade in commodity by
MCX (Multi Commodity exchange) and NCDEX (National Commodity
daily exchange. In NCDEX 55 commodity are to trade
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INVESTMENT PRODUCTS OFFERED BY KOTAK MAHINDRA
BANK
The following are the various products of Kotak Mahindra Bank:
DEMAT & ON LINE TRADING ACCOUNT :
The 3-in-1 account integrates your banking, broking and demat accounts.
This enables you to trade in shares without going through the hassles of
tracking settlement cycles, writing cheques and Transfer Instructions,
chasing your broker for cheques or Transfer Instructions etc.
INITIAL PUBLIC OFFERS(IPOS)
In the above products we have discussed investment in equity through
secondary markets .another way of investing in equity markets is through the
primary market route .whenever a company comes out with an initial public
offering you may choose to apply for the share. Based on number of valid
application received, the company would then allot the share to applicants.
The offline way of investing in an IPO is by filling physical application
forms, cheques. And submitting the forms through your broker. With
KOTAK MAHINDRA BANK all you have to do is filling number of share
on the site and submit.
DERIVATIVES
Customers wi th different types of risk profile can use derivatives.
Hedging the cash market positionideal for low risk profile.
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Taking advantage of arbitrage opportunity in equity and derivatives
marketsideal for low risk profile
Taking a view on stock/index for as long as 3 month periodmedium risk
profile
Speculative trading-high risk profile
KOTAK MAHINDRA BANK offers online investment in future and option,
with benefit of automated settlements and online risk monitoring system
Mutual Funds
Key Features
Assitance at every step of the investment process
An experienced research team to analyse and research the Mutual Fundsavailable in the market
Portfolio assistance
The team analysis and researches the Mutual Funds available in the market,
helping you make more informed decisions. The recommendations take into
account all relevant factors including the investment philosophy of the Asset
Management Company, portfolio quality, risk-adjusted returns and market
trends.
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The Mutual funds on advisory list range form Debt to Equity funds and are
drawn from top performing schemes of renowned Mutual Fund houses like
Franklin Templeton, Kotak, Reliance, Prudential ICICI etc.Relationship
Manager will recommend the funds that suit the investment objectives.
Instead of buying shares of different companies tracking the price
movements performance of the company,growth prospects of the industries
etc. and then taking your own buy/sell decision, you may consider making
investment in equity/debt market through the mutual fund route. Mutual
fund is a SEBI registered entity that pools the money of many individuals
investors to purchase the stocks, bond or other financial instruments.
Professional
Management and diversification are the two primary benefits of mutual fund
investing. For beginners, or for customer who are unable to spend time on
researching stocks themselves, mutual fund is an ideal route for a investment
in equity. Investing in mutual funds offline involves, tracking down the
agents appointed by the mutual funds AMCs, filling lengthy forms, writing
cheque, rushing to the office of the agents before the cut off timing to ensure
that the desired NAV is allotted
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BANK ASSURANCE
They offer a range of carefully selected insurance policies across the entire
spectrum of life insurance products Relationship managers will analyze your
insurance needs and develop the solution that works best for you.
KOTAK INSURANCE has a wide array of insurance plans that have been
designed with the philosophy that different individuals are bound to have
differing insurance needs.
The ideal insurance plan is one that addresses the exact insurance needs of
the individual that will depend on the age and life stage of the individual
apart from a host of other factors.
The various plans offered by KOTAK INSURANCE are as follows:
Kotak Smart Advantage Plan
Kotak Eternal Life Plans
Kotak Headstart Child Plans
Kotak Safe Investment Plan II
Kotak Flexi Plan
Kotak Easy Growth Plan
Kotak Capital Multiplier Plan
Kotak Term Plan
Kotak Preferred Term Plan
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CONVENIENCE BANKING
Anywhere, Anytime Banking
In today's day and age time is money. You work hard and have a busy
schedule. Doing banking should be easy and convenient and not add to
worries.
Kotak Mahindra Bank realize this and have specially tailored a wide range
of value added products and services to make money work for you. These,
coupled with the highest standard of customer care will make life simpler
and easier.
Multiple Banking Channels
Today the technology driven banks are finding various means to reduce
costs and reach out to as many customers as possible spread over a diverse
area. This has led to using multiple channels of delivery of their products.
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ATM (Automatic Teller Machine) :
An ATM is basically a machine that can deliver cash to the customers on
demand after authentication. However, nowadays we have ATMs that are
used to vend different FMCG products also. An ATM does the basic
function of a banks branch, i.e., delivering money on demand. Hence
setting of newer branches is not required thereby significantly lowering
infrastructure costs.
Cost reduction is however possible only when these machines are used. In
India, the average cash withdrawal per ATM per day has fallen from 100 last
years to 70 this year. Though the number of ATMs has increased since last
year, it is not in sync with the number of cards issued. Also, there are many
dormant cardholders who do not use the ATMs and prefer the teller
counters. In spite of these odds, Indian banks are increasing the number of
ATMs at a feverish pace. These machines also hold the keys to future
operational efficiency Account holders of Kotak Mahindra Bank Saving
Account having Visa Electron Debit Card can access other Banks ATM
machines unlimited times per month for free, after that the Account holder
has to pay nothing for the transaction. But also holders of ATM cards cannot
access machines belonging to other Banks.
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Net Banking:
Net banking means carrying out banking transactions via the Internet. Thus
the need for a branch is completely eliminated by technology. Also this
helps in serving the customer better and tailoring products better suited for
the customer.
A customer can view his account details, transaction history, order drafts,
electronically make payments, transfer funds, check his account position andelectronically communicate with the bank through the Internet for which he
may have wanted to visit the bank branch. Net banking helps a bank spread
its reach to the entire world at a fraction of the cost
Phone Banking:
This means carrying out of banking transaction through the telephone. A
customer can call up the banks help line or phone banking number to
conduct transactions like transfer of funds, making payments, checking of
account balance, ordering cheques, etc. This also eliminates the customer of
the need to visit the banksbranch.
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Mobile Banking
Banks can now help a customer conduct certain transactions through the
Mobile Phone with the help of technologies like WAP, SMS, etc. This helps
a bank to combine the Internet and telephone and leverage it to cut costs and
at the same time provide its customer the convenience. Thus it can be seen
that tech savvy banks are tapping the entire above alternative channels to cut
costs improve customer satisfaction
SMS Banking
Kotak Mahindra Bank's SMS Banking service enables you to access your
bank account, investment account and demat account on your Mobile Phone.
Now get latest update on your account balance, salary credits, large debits,
large credits, holding value and much more, on your mobile anytime.
INTERNET BANKING
INTRODUCTION
The Internet banking is changing the banking industry and is having the
major effects on banking relationships. Internet banking involves use of
Internet for delivery of banking products & services. It falls into four main
categories, from Level 1 - minimum functionality sites that offer only access
to deposit account data - to Level 4 sites highly sophisticated offerings
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enabling integrated sales of additional products and access to other financial
services- such as investment
and insurance.
DRIVERS OF CHANGE
Advantages previously held by large financial institutions have shrunk
considerably. The Internet has leveled the playing field and afforded open
access to customers in the global marketplace. Internet banking is a cost-
effective delivery channel for financial institutions. Consumers are
embracing the many benefits of Internet banking. Access to one's accounts at
anytime and from any location via the World Wide Web is a convenience
unknown a short time ago.
The primary drivers of Internet banking are:
Improve customer access
Facilitate the offering of more services
Increase customer loyalty
Attract new customers
Internet Banking is the most technological advanced means to do Banking.
Through this medium the Account holder can do various types of
transactions without having to leave his Office/Residence. The Account
holder has the convenience to do transaction no matter where he is in the
world at any time of the day. Internet is the most cost effective medium of
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Banking from the point of view of the Banks it costs a fraction to the Bank
as compared to other mediums like Branch Banking or ATM.
But this medium is not as favored a medium as it in the west , the reasons for
this is that firstly , this is a relatively new concept in India ,secondly ,
general perception that this is not safe , thirdly , computers and internet are
not widely spread all over the country.
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STRATEGIC ALLIANCES
NATIONAL ATM ALLIANCES
The Institute for Development and Research in Banking Technology
(IDRBT), a group established by the Reserve Bank of India (RBI) in 1996,
has planned to set up a national switch to hook up all of the country's
10,000-odd ATMs.
The idea of establishing ATM interconnectivity through a national switch
has been approved by the information chiefs of various Banks. The expected
cost of transactions routed through the switch is to be under 10 rupees (21
cents U.S.) each, due to the high volumes of transactions -- almost 100,000
per day.
CASH NET
It is an Alliance between Citibank, Industrial Development Bank of India,
Kotak Mahindra Bank and UTI Bank. This is the country's first independent
shared ATM network.
IDBI Bank received permission from the Reserve Bank (RBI) to serve as the
network's settlement bank.
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Bank are busy working it is important that they can find a way to visit the
Bank without having to miss out on work.
The Average Banking Hours of Kotak Mahindra Bank is from 9am to 7pm,
the Bank is open to the public for ten hours. These timings are convenient
for especially those Account holders who are working, these people can visit
the Bank after their Office finishes.
Apart from the Average Banking Hours Kotak Mahindra Bank offers to its
Account holders 24 Hour Branch, 365 Days Branch and the facility of
Sunday Banking.
Kotak Mahindra Bank is the only Bank which offers a 24 Hour Branch in
India, this is a big boon for people who cannot take the time out to visit the
Bank during the normal working hours and is also very handy during
emergencies.
The 365 Day Branch of Kotak Mahindra Bank is also unique and the only
other Bank offering this service is ABN Amro , this Branch is open
regardless of the fact that it is a Sunday or a public holiday. Sunday Banking
is very useful for people who are busy throughout the week and the only day
when they find the time is Sunday. Other Banks offering this service apart
from Kotak Mahindra Bank are ABN Amro and CITIBANK.
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Best Compliments Cardthe perfect gift
Introducing Best Compliments Card - the prepaid card from Kotak Mahindra
Bank. It lets your loved ones choose their own gift or shop or enjoy at any
place that accepts Visa cards, be it a shopping mall, a restaurant or a
multiplex. So go ahead and give someone the perfect gift!
No Kotak Mahindra Bank account required
Not restricted to a single brand or outlet - accepted at over 3 lakhs
merchant establishments in India that accept Visa cards
Can be used at your convenience- no need to spend the entire value in
a single purchase
Attractively packaged and ready-to-gift
Available at all Kotak Mahindra Bank branches
Valid for two years from date of issue of card
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FINANCIAL OVERVIEW
Annual results in brief
(Rs crore)
Mar ' 13 Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09
Sales 8,042.49 6,180.24 4,303.56 3,255.62 3,065.14
Operating profit 5,648.21 4,290.33 2,613.15 1,580.34 1,614.79
Interest 4,836.82 3,667.75 2,058.49 1,397.48 1,546.60
Gross profit 2,156.61 1,655.01 1,324.79 1,297.00 679.99
EPS (Rs) 18.23 14.65 11.10 8.06 3.99
Annual results in details
Mar ' 13 Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09
Other income 1,160.67 977.35 633.04 628.24 357.86
Stock adjustment - - - - -
Raw material - - - - -
Power and fuel - - - - -
Employee expenses 1,051.18 872.19 751.15 555.79 -
Excise - - - - -
Admin and selling expenses - - - - -
Research and development expenses - - - - -
Expenses capitalised - - - - -
Other expenses 1,158.55 962.64 802.17 633.60 1,196.42
Provisions made 184.55 55.08 137.09 485.89 253.93
Depreciation - - - - -
Taxation 611.34 514.87 369.52 250.00 149.96
Net profit / loss 1,360.72 1,085.05 818.18 561.11 276.10
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Profit loss account
(Rs crore)
Mar ' 13 Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09
Income
Operating income 8,042.49 7,032.28 4,739.06 3,655.79 3,262.68
Expenses
Material consumed - - - - -
Manufacturing expenses - - - - -
Personnel expenses 1,075.14 902.36 783.83 583.48 583.63
Selling expenses - 130.86 103.25 53.81 66.78
Adminstrative expenses 1,002.06 604.67 543.24 720.13 613.64
Expenses capitalised - - - - -
Cost of sales 2,077.20 1,637.89 1,430.32 1,357.41 1,264.05
Operating profit 1,128.47 1,726.64 1,250.25 900.90 452.03
Other recurring income 1,160.66 13.86 18.94 26.14 42.00
Adjusted PBDIT 2,289.14 1,740.50 1,269.20 927.05 494.03
Financial expenses 4,836.82 3,667.75 2,058.49 1,397.48 1,546.60
Depreciation 132.53 116.76 98.27 90.00 69.56
Other write offs - - - - -
Adjusted PBT -2,680.21 -2,044.00 -887.55 837.05 424.47
Tax charges - 514.88 369.52 250.00 149.96
Adjusted PAT - 1,084.49 818.16 564.05 275.82
Non recurring items - 0.56 0.02 -2.94 0.27
Other non cash adjustments - - - 2.01 -
Reported net profit 1,360.72 1,085.05 818.18 563.11 276.10
Earnigs before appropriation 3,523.51 2,579.57 1,784.09 1,212.06 804.27
Equity dividend 52.38 44.49 36.88 29.66 25.96
Preference dividend - - - - -
Dividend tax 7.29 7.22 4.37 - 1.86
Retained earnings 3,463.84 2,527.86 1,742.84 1,182.40 776.45
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Balance sheet(Rs crore)
Mar ' 13 Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09
Sources of funds
Owner's fund
Equity share capital 373.30 370.34 368.44 348.14 345.67
Share application money - - - - -
Preference share capital - - - - -
Reserves & surplus 9,091.19 7,610.41 6,464.95 4,191.78 3,559.86
Loan funds
Secured loans - - - - -
Unsecured loans 51,028.77 38,536.52 29,260.97 23,886.47 15,644.93
Total 60,493.26 46,517.28 36,094.36 28,426.38 19,550.46
Uses of funds
Fixed assets
Gross block 464.42 955.41 831.80 745.34 460.61
Less : revaluation reserve - - - - -
Less : accumulated depreciation - 505.45 406.20 317.69 247.25
Net block 464.42 449.97 425.61 427.65 213.36
Capital work-in-progress - - - - -
Investments 28,873.43 21,566.81 17,121.44 12,512.66 9,110.18
Net current assets
Current assets, loans & advances 50,666.68 1,935.91 1,503.33 1,420.69 1,622.33
Less : current liabilities & provisions 2,789.81 2,553.67 3,032.36 2,869.42 3,257.34
Total net current assets 47,876.87 -617.76 -1,529.03 -1,448.73 -1,635.01
Miscellaneous expenses not written - - - - -
Total 77,214.72 21,399.01 16,018.01 11,491.58 7,688.52
Notes:
Book value of unquoted investments - - - - -
Market value of quoted investments - - - - -
Contingent liabilities 29,301.30 23,485.52 16,761.36 7,219.79 5,674.45
Number of equity sharesoutstanding (Lacs) 7466.09 7406.90 7368.72 3481.41 3456.69
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Ratios
(Rs crore)
Mar ' 13 Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09
Per share ratios
Adjusted EPS (Rs) 18.23 14.64 11.10 16.20 7.98
Adjusted cash EPS (Rs) 20.00 16.22 12.44 18.79 9.99
Reported EPS (Rs) 18.23 14.65 11.10 16.12 7.99
Reported cash EPS (Rs) 20.00 16.23 12.44 18.70 10.00
Dividend per share 0.70 0.60 0.50 0.85 0.75
Operating profit per share (Rs) 15.11 23.31 16.97 25.88 13.08
Book value (excl rev res) per share EPS (Rs) 126.77 107.75 92.74 130.40 112.98
Book value (incl rev res) per share EPS (Rs) 126.77 107.75 92.74 130.40 112.98
Net operating income per share EPS (Rs) 107.72 94.94 64.31 105.01 94.39
Free reserves per share EPS (Rs) - 87.75 76.84 102.80 89.63
Profitability ratios
Operating margin (%) 14.03 24.55 26.38 24.64 13.85
Gross profit margin (%) 12.38 22.89 24.30 22.18 11.72
Net profit margin (%) 14.78 15.39 17.19 15.23 8.35
Adjusted cash margin (%) 16.22 17.04 19.26 17.76 10.45
Adjusted return on net worth (%) 14.37 13.58 11.97 12.42 7.06
Reported return on net worth (%) 14.37 13.59 11.97 12.35 7.06
Return on long term funds (%) 65.48 65.99 47.50 48.71 50.50
Leverage ratios
Long term debt / Equity - - - - -
Total debt/equity 5.39 4.83 4.28 5.26 4.01
Owners fund as % of total source 15.64 17.15 18.93 15.97 19.97
Fixed assets turnover ratio 0.11 0.12 5.70 4.90 7.08
Liquidity ratios
Current ratio 18.16 0.75 0.49 0.49 0.49
Current ratio (inc. st loans) 0.94 0.04 0.04 0.05 0.08
Quick ratio 18.95 16.85 10.86 8.46 5.91
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INTRODUCTION TO KOTAK SECURITIES
Kotak Mahindra has international partnerships with Goldman Sachs(one of the world's largest investment banks and brokerage firms), Ford
Credit (one of the world's largest dedicated automobile financiers) and Old
Mutual (a large insurance, banking and asset management conglomerate).
Kotak Securities, an affiliate of Kotak Mahindra Bank, is the stock-
broking and distribution arm of the Kotak Mahindra Group. The institutional
business division, which provides AKSESS, primarily covers secondary
market broking. It caters to the needs of foreign and Indian institutional
investors in Indian equities (both local shares and GDRs). The division also
has a comprehensive research cell with sectoral analysts covering all the
major areas of the Indian economy.
Kotak Securities Ltd. is India's leading stock broking house with a
market share of around 8.5 % as on 31st March. Kotak Securities Ltd. has
been the largest in IPO distribution.
The company has a full-fledged research division involved in Macro
Economic studies, Sectorial research and Company Specific Equity
Research combined with a strong and well networked sales force whichhelps deliver current and up to date market information and news.
Kotak Securities Ltd is also a depository participant with National
Securities Depository Limited (NSDL) and Central Depository Services
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Limited (CDSL), providing dual benefit services wherein the investors can
use the brokerage services of the company for executing the transactions and
the depository services for settling them.
Kotak Securities has 195 branches servicing more than 2,20,000
customers and a coverage of 231 Cities. Kotaksecurities.com, the online
division of Kotak Securities Limited offers Internet Broking services and
also online IPO and Mutual Fund Investments.
Kotak Securities Limited manages assets over 2500 crores of Assets
Under Management (AUM) .The portfolio Management Services provides
top class service, catering to the high end of the market. Portfolio
Management from Kotak Securities comes as an answer to those who would
like to grow exponentially on the crest of the stock market, with the backing
of an expert.
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INTRODUCTION TO CONECPTS OF TRADING
FUNDAMENTAL AND TECHNICAL ANALYSIS:
Fundamental analysis
The basic purpose of buying a security is to earn dividends and
ultimately sell it at higher price. An investor therefore is interested in
obtaining estimates of future prices of the share. These in turn will depend
upon the performance of the industry to which the company belongs and the
general economic situation of the country. The multitude of factors affecting
a companys profitability can be broadly classified as:
1. Economic wide factors: these includes the factors like growth rate ofthe economy, the rate of inflation, foreign exchange rates etc which
affects profitability of all companies.
2. Industry wide factors: these include factors which are specific to
industry to which the company belongs. For instance the demand
supply gap in the industry, the emergence of substitutes, and changesin government policies towards industry affects the company
belonging to an industry.
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3. Company wide factor: these factors are specific to a firm. The firm
specific factors like plant and machinery, the brand image of the
product, and ability of the management to affect the profitability.
Fundamental analysis considers the financial and economic data that
may influence the viability of a company. There are many flavors of
fundamental analysis centered on such concepts as value, growth and
turnarounds. Technical analysis is the study of the price chart. It assumes
that by looking at the progress of that little squiggly line you can forecast the
future trend of a stock. Fundamental analysis is essential to most investors,
and technical analysis is essential to most traders and speculators.
An investor with rational and scientific approach will therefore be
interested in analyzing the influence of the expected performance of the
company, industry and economy as a whole on share prices, even before
taking the investment decision such analysis is called fundamental analysis.
Fundamental analysis is the method of evaluating securities by
attempting to measure the intrinsic value of a particular stock. It is the study
of everything from the overall economy and industry conditions, to the
financial condition and management of specific companies (i.e., using real
data to evaluate a stocks value). The method utilizes items such as
revenues, earnings, return on equity and profit margins to determine a
companys underlying value and potential for future growth.
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One of the major assumptions under fundamental analysis is that,
even though things get mis priced in the market from time to time, the price
of an asset will eventually gravitate toward its true value. This seems to be a
reasonable bet considering the long upward march of quality stocks in
general despite regular setbacks and periods of irrational exuberance. The
key strategy for the fundamentalist is to buy when prices are at or below this
intrinsic value and sell when they got overpriced.
Technical analysis:
Technical analysis is the examination of past price movements to
forecast future price movements. Technical analysts are sometimes referred
to as chartists because they rely almost exclusively on charts for their
analysis.
Moving Average:
A Moving Average is an indicator that shows the averagevalue of a
security's price over a period of time. When calculating a moving average, a
mathematical analysis of the security's average value over a predetermined
time period is made. As the securities price changes, its average price
moves up or down.
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There are several popular ways to calculate a moving average. Meta
Stock for Java calculates a "simple" moving average--meaning that equal
weight is given to each price over the calculation period.
Interpretation:
The most popular method of interpreting a moving average is
to compare the relationship between moving averages of the security's price
with the security's price itself. A buy signal is generated when the security's
price rises above its moving average and a sell signal is generated when thesecurity's price falls below its moving average.
This type of moving average trading system is not intended to get you
in at the exact bottom nor out at the exact top. Rather, it is designed to keep
you in line with the security's price trend by buying shortly after the
security's price bottoms and selling shortly after it tops.
The critical element in a moving average is the number of time
periods used in calculating the average. When using hindsight, you can
always find a moving average that would have been profitable. The key is to
find a moving average that will be consistently profitable. The most popular
moving average is the 39-week (or 200-day) moving average. This moving
average has an excellent track record in timing the major (long-term) market
cycles.
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Advantages:
The advantage of moving average system of this type (i.e., buying and
selling when prices break through their moving average) is that you will
always be on the "right" side of the market: prices cannot rise very much
without the price rising above its average price. The disadvantage is that you
will always buy and sell some late. If the trend does not last for a significant
period of time, typically twice the length of the moving average, you will
lose your money.
Support and Resistance:
Support and resistance represent key junctures where the forces of
supply and demand meet. In the financial markets, prices are driven by
excessive supply (down) and demand (up). Supply is synonymous with
bearish, bears and selling. Demand is synonymous with bullish, bulls and
buying. These terms are used interchangeably throughout this and other
articles. As demand increases, prices advance and as supply increases, prices
decline. When supply and demand are equal, prices move sideways as bulls
and bears slug it out for control.
What Is Support?
Support is the price level at which demand is thought to be strongenough to prevent the price from declining further. The logic dictates that as
the price declines towards support and gets cheaper, buyers become more
inclined to buy and sellers become less inclined to sell. By the time the price
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reaches the support level, it is believed that demand will overcome supply
and prevent the price from falling below support.
Support does not always hold and a break below support signals that
the bears have won out over the bulls. A decline below support indicates a
new willingness to sell and/or a lack of incentive to buy. Support breaks and
new lows signal that sellers have reduced their expectations and are willing
sell at even lower prices. In addition, buyers could not be coerced into
buying until prices declined below support or below the previous low. Once
support is broken, another support level will have to be established at a
lower level.
Where Is Support Established?
Support levels are usually below the current price, but it is not
uncommon for a security to trade at or near support. Technical analysis is
not an exact science and it is sometimes difficult to set exact support levels.
In addition, price movements can be volatile and dip below support briefly.
Sometimes it does not seem logical to consider a support level broken if the
price closes 1/8 below the established support level. For this reason, some
traders and investors establish support zones.
What Is Resistance?
Resistance is the price level at which selling is thought to be strong
enough to prevent the price from rising further. The logic dictates that as the
price advances towards resistance, sellers become more inclined to sell and
buyers become less inclined to buy. By the time the price reaches the
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resistance level, it is believed that supply will overcome demand and prevent
the price from rising above resistance.
Resistance does not always hold and a break above resistance signals
that the bulls have won out over the bears. A break above resistance shows a
new willingness to buy and/or a lack of incentive to sell. Resistance breaks
and new highs indicate buyers have increased their expectations and are
willing to buy at even higher prices. In addition, sellers could not be coerced
into selling until prices rose above resistance or above the previous high.
Once resistance is broken, another resistance level will have to be
established at a higher level.
Where Is Resistance Established?
Resistance levels are usually above the current price, but it is not
uncommon for a security to trade at or near resistance. In addition, price
movements can be volatile and rise above resistance briefly. Sometimes it
does not seem logical to consider a resistance level broken if the price closes
1/8 above the established resistance level. For this reason, some traders and
investors establish resistance zones.
So, Here, Identification of key support and resistance levels is an
essential ingredient to successful technical analysis. Even though it is
sometimes difficult to establish exact support and resistance levels, being
aware of their existence and location can greatly enhance analysis and
forecasting abilities. If a security is approaching an important support level,
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it can serve as an alert to be extra vigilant in looking for signs of increased
buying pressure and a potential reversal. If a security is approaching a
resistance level, it can act as an alert to look for signs of increased selling
pressure and potential reversal. If a support or resistance level is broken, it
signals that the relationship between supply and demand has changed. A
resistance breakout signals that demand (bulls) has gained the upper hand
and a support break signals that supply (bears) has won the battle.
Price Oscillator:
The Price Oscillator displays the difference between two moving
averages of a security's price. The difference between the moving averages
can be expressed in either points or percentages.
The Price Oscillator is almost identical to the MACD, except that the
Price Oscillator can use any two user-specified moving averages.
(The MACD always uses 12 and 26-day moving averages, and always
expresses the difference in points.)
Interpretation:
Moving average analysis typically generates buy signals when a short-
term moving average (or the security's price) rises above a longer-term
moving average. Conversely, sell signals are generated when a shorter-term
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moving average (or the security's price) falls below a longer-term moving
average. The Price Oscillator illustrates the cyclical and often profitable
signals generated by these one or two moving average systems.
Price Rate-Of-Change:
The Price Rate-of-Change ("ROC") indicator displays the difference
between the current price and the price x-time periods ago. The difference
can be displayed in either points or as a percentage. The Momentum
indicator displays the same information, but expresses it as a ratio.
Interpretation:
It is a well-recognized phenomenon that security prices surge ahead
and retract in a cyclical wave-like motion. This cyclical action is the result
of the changing expectations as bulls and bears struggle to control prices.
The ROC displays the wave-like motion in an oscillator format bymeasuring the amount that prices have changed over a given time
period. As prices increase, the ROC rises; as prices fall, the ROC falls. The
greater the change in prices, the greater the change in the ROC.
The time period used to calculate the ROC may range from 1-day
(which results in a volatile chart showing the daily price change) to 200-days
(or longer). The most popular time periods are the 12- and 25-day ROC for
short to intermediate-term trading. These time periods were popularized by
Gerald Appel and Fred Hitschler in their book, Stock Market Trading
Systems.
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The 12-day ROC is an excellent short- to intermediate-term
overbought/oversold indicator. The higher the ROC, the more overbought
the security; the lower the ROC, the more likely a rally. However, as with
all overbought/oversold indicators, it is prudent to wait for the market to
begin to correct (i.e., turn up or down) before placing your trade. A market
that appears overbought may remain overbought for some time. In fact,
extremely overbought/oversold readings usually imply a continuationof the
current trend.
The 12-day ROC tends to be very cyclical, oscillating back and forth
in a fairly regular cycle. Often, price changes can be anticipated by studying
the previous cycles of the ROC and relating the previous cycles to the
current market
Relative Strength Index (RSI):
The Relative Strength Index ("RSI") is a popular oscillator. It was
first introduced by Welles Wilder in an article in Commodities (now known
as Futures) Magazine in June, 1978.
The name "Relative Strength Index" is slightly misleading as the
Relative Strength Index does not compare the relative strength of two
securities, but rather the internal strength of a single security. A more
appropriate name might be "Internal Strength Index."
Interpretation:
When Wilder introduced the Relative Strength Index, he
recommended using a 14-day Relative Strength Index. Since then, the 9-day
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and 25-day Relative Strength Indexs have also gained popularity. The fewer
days used to calculate the Relative Strength Index, the more volatile the
indicator.
The Relative Strength Index is a price-following oscillator that ranges
between 0 and 100. A popular method of analyzing the Relative Strength
Index is to look for a divergence in which the security is making a new high,
but the Relative Strength Index is failing to surpass its previous high. This
divergence is an indication of an impending reversal. When the Relative
Strength Index then turns down and falls below its most recent trough, it is
said to have completed a "failure swing." The failure swing is considered a
confirmation of the impending reversal.
The five uses of the Relative Strength Index:
1. Tops and Bottoms. The Relative Strength Index usually tops above
70 and bottoms below 30. It usually forms these tops and bottoms
before the underlying price chart.
2. Chart Formations. The Relative Strength Index often forms chart
patterns such as head and shoulders or triangles that may or may not
be visible on the price chart.
3. Failure Swings(also known as support or resistance penetrations or
breakouts). This is where the Relative Strength Index surpasses a
previous high (peak) or falls below a recent low (trough).
4. Support and Resistance. The Relative Strength Index shows,
sometimes more clearly than price themselves, levels of support and
resistance.
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Divergences. As discussed above, divergences occur when the price makes
a new high (or low) that is not confirmed by a new high (or low) in the
Relative Strength Index. Prices usually correct and move in the direction of
the Relative Strength Index.
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The Bar Chart:
TheBar chart is one of the most popular types of charts used in
technical analysis. As illustrated on the left, the top of the vertical line
indicates the highest price at which a security traded during the day, and the
bottom represents the lowest price. The closing price is displayed on the
right side of the bar and the opening price is shown on the left side of the
bar. A single bar like the one to the left represents one day oftrading.
The chart below is an example of a bar chart for AT&T (T):
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The advantage of using a bar chart over a straight-line graph is that it
shows the high, low, open and close for each particular day.
Candle sticks Charting:
Candlestick charts have been around for hundreds of years. They are
often referred to as "Japanese candles" because the Japanese would use them
to analyze the price of rice contracts.
Similar to a bar chart, candlestick charts also display the open, close,
daily high and daily low. The difference is the use of color to show if the
stockwent up or down over the day.
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The chart below is an example of a candlestick chartfor AT&T (T).
Green bars indicate the stock price rose, red indicates a decline:
Investors seem to have a "love/hate" relationship with candlestick
charts. People either love them and use them frequently or they are
completely turned off by them. There are several patterns to look for with
candlestick charts - here are a few of the popular ones and what they mean.
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.
This is a bullish pattern - the stock opened at (or near) its low and
closed near its high
The opposite of the pattern above, this is a bearish pattern. It
indicates that the stock opened at (or near) its high and dropped
substantially to close near its low.
Known as "the hammer", this is a bullish pattern only if it occursafter the stock price has dropped for several days. A small body along
with a large range identifies a hammer. This pattern indicates that a
reversal in the downtrend is in the works.
Known as a "star. For the most part, stars typically indicate a
reversal and or indecision. There is a possibility that after seeing a
star there will be a reversal or change in the current trend.
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Point and Figure Chart:
The point & figure (P&F) chart is somewhat rare. In fact, most charting
services do not even offer it. This chart plots day-to-day increases and
declines in price: increases are represented by a rising stack of "X"s, while
decreases are represented by a declining stack of "O"s. This type of chart
was traditionally used for intradaycharting (a stockchart for just one day),
mainly because it can be long and tedious to create a P&F chart manually
over a longer period of time.
The idea behind P&F charts is that they help you to filter out less
significant price movements and to focus on the most important trends.
Below is an example of a P&F chart for AT&T (T):
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POPULAR CHARTING PATTERNS:
Technical analysts often use proven successful price patterns from
greatstocksas tools to find new great stocks. Let's look at a few examples
Cup and Handle- This is a pattern on a bar chart that can be as short
as seven weeks and as long as 65 weeks. The cup is in the shape of a
"U". The handle has a slight downward drift. The right-hand side of
the pattern has lowtrading volume.As thestockcomes up to test the
old highs, the stock will incur selling pressure by the people who
bought at or near the old high. This selling pressure will make the
stock price trade sideways with a tendency towards a downtrend for
anywhere from four days to four weeks, then it will take off.
This pattern looks like a pot with a handle. It is one of the easier
patterns to detect; and investors have made a lot of money using it.
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Head and Shoulders- This is a chart formation resembling an "M" in
which a stock's price:
- Rises to a peak and then declines, then
- Rises above the former peak and again declines, and then rises
again but not to the second peak and again declines.
The first and third peaks are shoulders, and the second peak forms the
head. This pattern is considered a verybearishindicator.
Double Bottom - This pattern resembles a "W" and occurs when a
stock price drops to a similar price level twice within a few weeks or
months. You should buy when the price passes the highest point in the
handle. In a perfect double bottom, the second decline should
normally go slightly lower than the first decline to create a shakeout
of jittery investors. The middle point of the "W" should not go into
new high ground. This is a very Bullish indicator.
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The belief is that, after two drops in the stock price, the jittery
investors will be out and the long-term investors will still be holding on.
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CONCLUSION AND RECOMMENDATIONS
1. Kotak Mahindra Bank is Leading Bank in the country, it provides a
variety of products and services to different segments of customers.
2. The Bank aims to serve customers from teenagers to senior citizens,
hence different products designed to suit specific requirements of the
above.
3. Aims to serve all classes of the society from the salaried middle class
to the high income business class.
Customers are categorized and segmented according to their
requirements and needs.
For Example, the EDGE Saving Account aims to serve middle classcustomers so minimum balance required to be maintained is Rs.
10000. While the PRO and ACE Saving Accounts are targeted at high
income Customers, the minimum balance requirement is Rs. 20000
and Rs. 75000.
4. Customers who are more profitable to the Bank (High Value
Customers) are provided special facilities. Priority Banking is meant
to serve these high value customers.
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5. The Bank prides itself with the ability to provide differentiate
products in the crowed market of saving accounts. Bank offers the
free home baking, special co-branded debit cards (Smart fill Debit
Card) which makes its product unique.
6. The Bank is also involved in marketing activities which serves as a
medium of advertisement for the Bank. These are as follows:
Extended happy hours at certainpubs in Delhi for the Banks account
holders.
Gift Vouchers on making utility payments, such as cell phones,
electricity and MTNL bills.
Free Gifts like caps, pens/wollets to its customers.
Free add-on cards for relatives.
7. The Bank wants its customers to transact more through Internet
Banking and ATM, Rather than the customers using the branch.
8. The Debit Cards provided by the Bank are Internationally Accepted
around the world, hence giving the customers the convenience to
transact anytime, anywhere.
9. The Bank has tied up with other Banks so that its customers can use
other Banks ATM facility for free transactions
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10.The Bank also provides DEMAT account and also sells Mutual
Funds, this provides the Bank and Government additional revenue.
11.The Bank has been very successful in enlarging its customer baseduring the last couple of years.
12.The Number One Reason of people choosing Kotak Mahindra Bank is
the Brand Name/Reputation of the Bank. Hence it should be careful
that the Brand name and Goodwill the Bank has earned is not diluted.
13.The Biggest competitors of the Bank are AXIS Bank, ICICI Bank,
HDFC Bank and STANDRAD CHARTERED.
14.ATM Facility is most popular way to transact with the Bank.
15.Overall the customers appreciate the service and products offered by
the Bank and are willing to recommend the Bank to their
acquaintances , But more attention has to paid towards:
Increasing the number of ATM machines.
Improving Internet Banking Facility.
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BIBLIOGRAPHY
There was immense need and flow of the information while conducting the
analysis as well as while writing the thesis report, which was gathered
through various sources mentioned below:
Various Magazines and Newspapers such as
Outlook
Financial Times
The Economic Times
The Times of India
The Hindustan Times
Other References
Questionnaires, Journals, Broachers and various other documents
gathered and collected from bank and various other sources suc