management thesis interim report on factors affecting personal financial planning with special...

8/14/2019 Management thesis interim report on factors affecting personal financial planning with special referance of HDFC

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HDFC MUTUAL

FUNDHDFC MUTUAL

FUND

INTRIM

REPORT MT-2

A STUDY OFFACTORSAFFECTINGPERSONAL

FINANCIALPLANNING WITHSPECIALREFERANCE TOHDFC MUTUALFUND IN PATNA

AJIT KUMAR PANDEY1/3/2010


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HDFC MUTUAL

FUND

A


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THESIS ONCUSTOMER SURVEY TITLED

A STUDY OF FACTORS AFFECTING PERSONAL

FINANCIAL PLANNING WITH SPECIAL REFERANCE

TO HDFC MUTUAL FUND IN PATNA

BY

AJIT Kumar PANDEY

ENROLLMENT NO: - 8NBPA102

COURSE: - 3RD SEM. MBA (2008-10)

FACULTY GUIDE: - PROF. SRIDHAR

Kumar

DECLARATION


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THIS REPORT IS SUBMITTED FOR THE

PARTIAL FULLFILLMENT OF THE

REQUIREMENT OF THE MBA PROGRAM

(THE CLASS OF 2008-10)

AJIT Kumar PANDEY

TABLE OF

CONTENTSS.NO TOPIC PAGE NO.


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1 TITLE PAGE 02

2 DECLARATION 033 ACKNOWLEDGEMENT 05

4 SUMMARY OF PROGRESS 06

5 INTRODUCTION 07

6 INDUSTRY PROFILE 08

7 COMPANY PROFILE 11

8 BODY OF THESIS 15

9 literature/review 18

10 QUESTIONNAIRE 23

11 REFERENCES 26

ACKNOWLEDGEME

NT

It is matter of great privilege for me to be attached with HDFC and do

research, which enhanced my practical knowledge. I do acknowledge


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that this research report is outcome of constructive support and

cooperation of many individual.

First of all I wish to pay my deep sense of gratitude to our centre head

MR. SANDEEP DUBEY for providing me an opportunity to undergo

practical training in a reputed organization likeHDFC. Secondly I am

thankful to my faculty guide MR. SRIDHAR Kumar for this co-

operation and friendly behavior to bring this project in this present form.

Thirdly, I am highly thankful to all the employee ofHDFC, Patna for

providing me a great opportunity of working on my research for a

dynamic and growing organization and allow me to carry out a very

challenging and satisfying project. In this regard I especially thanks to

Mr. ASHUTOSH KUMAR (SALES MANAGER, HDFC MUTUAL

FUND, Patna) for his co-operation and guidance.

At last but not the least, I sincerely thank to my entire batch mates for

providing me a valuable suggestions, guidance and cooperation and

generosity in completing my research work.

SUMMARY OF THE

PROGRESS


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This project is an attempt A Study of Factors Affecting Personal

Financial Planning with Special Reference to HDFC Mutual Fund inPatna. It is a comparative analysis of performance ofHDFC& its

competitors in financial market of the Patna. The project also tries to go

in the reasons of the current trends and provide valuable suggestions to

HDFC which could help it in retaining its position and gaining his

customer trust to catch a big market share.

In order to complete my Management thesis I have collected data from:1. Company

2. Competitors

3. Customers

4. Employees

For collecting data I have designed questionnaire for CUSTOMERS

through which I have gathered data and analysis it. Now, I am tabulating

that data according to requirement of management thesis.

IntroductionSurvey is the medium or tool which is used to communicate to the

customers about the product and its market potential. Whereas market

potential of the companys product. Survey is made at the corporate


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level to evaluate the performance of product and to analyze the market

condition. Market strategies are recommended as per the interpretation

of primary data got from the survey conducted. This also helps in

promoting sale.

As brand image plays an important role in the sale of any product. So

for a company likeHDFCwhich on regular basis measure the

performance of its sales and after sales to give better service to the

customers and satisfy their growing expectation. It is necessary for a

company to continuously review their performance and other

promotional schemes and constantly monitoring the changes takingplaces to face the growing competition.

The study mainly concentrates on the Personal financial planning of

Existing product and measuring the market share ofHDFCproducts and

secondly to know the strength and weakness ofHDFCwhether

customer is satisfied with the product.

Need for this study arises as surveys play a key role in finding the status

of product in market. It helps in interacting with customer directly;through which customer could easily give their input. Therefore it

becomes necessary for any firm to know about performance of his

product and the customer satisfaction level. This study was done at

HDFCltd. Patna.

INDUSTRY

PROFILE


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India is also one of the fastest growing markets for mutual funds industry

attracting a host of global players. The combination of increasing number of funds

houses (along with new schemes) and increase in the number of people parking

their savings in mutual funds has resulted in total funds mobilization increasing at

a whooping 126.93 percent during 2009-10 quarter 2nd result to stand at US$ 1.07

trillion as against US$ 484.13 billion compared to 2008-09.

The average assets under management (AUM) of the mutual fund industry for

October 2009 stood at US$ 134.76 billion as against US$ 89.86 billion at the end

of March 2009.

With accelerating investor interest shown in mutual fund segment, the number of

investor folios of the MFs increased to 43.7 million at the end of October 2009,

from 27.9 at the end of march 2009 ( a growth rate of 54 percent). Simultaneously,

there has been an increase in the number of distributors to 1,29,108 (excluding 118

banks) till March 2009 from 72,108 in March 2008.

In the calendar year (2010), the growth momentum of the mutual fund industry

continues. Total fund mobilization has increased by a whooping 84.08 percent to

US$ 221.73 billion during October 2009, compared to US$ 120.45 billion In

April-May 2009. Consequently, average AUM of the mutual fund industry has


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increased to US$ 140.04 billion for October 2009, against US$ 90.1 billion in

March 2009.

Continuing the growth, the Indian mutual funds market is estimated to grow at a

CAGR of 18 percent in the next five years, with the countrys mutual funds assets

expected to more than double to US$ 298.73 billion by 2012, according to a report

by US-based financial services research and consulting firm Cerulli Associates.

COMPANY PROFILE


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INTRODUCTION

HDFC Incorporated in 1977 with a share capital of Rs 10 Crores, HDFC has sinceemerged as the largest residential mortgage finance institution in the country. The

corporation has had a series of share issues raising its capital to Rs. 119 Crores.

The gross premium income for the year ending March 31, 2007 stood at Rs. 2,856

Crores and new business premium income at Rs. 1,624 Crores. The company has

covered over 8,77,000 lives year ending March 31, 2007.

HDFC operates through almost 450 locations throughout the country with its

corporate head quarters in Mumbai, India. HDFC also has an International Office

in Dubai, UAE with service associates in Kuwait, Oman and Qatar. HDFC is the

largest housing company in India for the last 27 years.

SNAPSHOT-I

Incorporated in 1977 as the first specialized Mortgage Company in India.

Almost 90% of initial shareholding in the hands of domestic institutes and

retail investors. Current 77% of shares held by foreign institutional

investors.

Besides the core business of mortgage HDFC has evolved into a financial

conglomerate with holdings In:

HDFC Standard Life insurance Company- HDFC holds 78.07 %.

HDFC Asset Management Company HDFC holds 50.1%

HDFC Bank- HDFC holds 22.25%.

Interline Global (Business Process Outsourcing) HDFC holds 50%.

HDFC Chubb General Insurance Company HDFC holds 74%.


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SNAPSHOT-II

Loan Approvals Rs. 805 billion.

(Up to Dec 2007) (US $ 18.30 bn.)

Loan Disbursements Rs.669 billion

(Up to Dec. 2007) (US $ 15.20 bn)

Housing Units financed 2.5 million.

Distribution

Offices 181

Outreach Programs 90

KEY PLAYERS

Mr. Deepak S Parekhis the Chairman of the Company. He is also the Executive

Chairman of Housing Development Finance Corporation Limited (HDFC

Limited). He joined HDFC Limited in a senior management position in 1978. He

was inducted as a whole-time director of HDFC Limited in 1985 and was

appointed as its Executive Chairman in 1993. He is the Chief Executive Officer of

HDFC Limited. Mr. Parekh is a Fellow of the Institute of Chartered Accountants

(England & Wales).

Mr. Deepak M Satwalekaris the Managing Director and CEO of the Company

since November, 2000. Prior to this, he was the Managing Director of HDFC

Limited since 1993. Mr. Satwalekar obtained a Bachelors Degree in Technology


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from the Indian Institute of Technology, Bombay and a Masters Degree in

Business Administration from The American University, Washington DC.

GROUP COMPANIES

HDFC Bank: World Class Indian Bank- among the top private banks in India.

HDFC AMC: One of the top 3 AMCs in India- Preferred investment manager.

Intel net Global: BPO services for international customers.

CIBIL: Credit Information Bureau India Limited.

HDFC Chubb: Upcoming Private companies in the field of General Insurance.

HDFC Mutual Fund

HDFC reality.com: Helps to search properties in all major cities in India

HDFC securities

This is the group profile of HDFC group now we take up a look at

HDFC Mutual fund but before that have a look upon value chain of

banking sector in India.


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BANKING VALUE CHAIN IN INDIA

BANKING VALUE CHAIN IN INDIA

CREDIT BANKS CREDIT TODEMAND DEPOSIT GOVERNMENT

HOUSE TIME DEPOSIT COMMERCIAL SECTOR

HOLD CERTI. OF DEPOSIT BANK CREDIT, NON

FOOD PRIMARY DEALER

BANKING SERVICES MARKETING & SALES

INSURANCE SERVICES NEW A/C

TELE BANKING I.T. SUPPORT PUBLIC RELATIONS

E-BANKING ADMINISTRATION OMBUDSPERSON

MOBILE BANKING HUMAN RESOURCE DIRECT SELLING AGENT


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INVESTMENT BANKING BRANDING AND ADVT.

WEALTH MGMT SERVICE RBI AND REGULATIONS, CRR DATABASECALL MONEY MARKET REPO, R.REPO, SLR, CAN, INTRANET-INTERNETSOURCE: WWW.RBI.GOV.IN BANK RATE BRANCH BANKING

HDFC MUTUAL FUNDPROFILE

The housing development finance corporation was the first to receive an in

principle approval from the reserve bank of India to set up a bank in the

private sector, as a part of RBIs liberalization of the Indian economy in

1994 in the name of HDFC bank ltd. with its registered office in Mumbai,

India. HDFC bank commenced its operations as a scheduled commercial

bank in January 1995.

PROMOTER

HDFC is Indias premier housing finance company and enjoys an

impeccable track record in India as well as in international markets. Since

its inception in 1977, the corporation has maintained a consistent and

healthy growth in its operations to remain the market leader in mortgages.

Its outstanding loan portfolio covers well over a million dwelling units.

HDFC has developed significant expertise in retail mortgage loans to

different market segments and also has a large corporate client base for its

housing related credit facilities. With its experience in the financial markets,


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a strong market reputation, large shareholder base and unique consumer

franchise, HDFC was ideally positioned to promote a bank in the Indian

environment.

BUSINESS FOCUS

HDFC banks mission is to be a world class Indian bank. The objective is to

build sound customer franchisees across distinct businesses so as to be the

preferred provider of banking services for target retail and wholesale

customer segments, and to achieve a healthy growth in profitability,

consistent with banks risk appetite.

AMALGAMATIONS AND MERGERS

In terms of milestones achieved in the banking industry, Times bank Ltd. (a

private sector bank promoted by Bennett, Coleman & co. /times group) was

merged with HDFC bank effective February 26, 2000.

As per the scheme of amalgamation approved by the shareholders of both

banks and the reserve bank of India, shareholders of times bank received 1

share of HDFC bank for every 5.75 shares of times bank.


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On February 2008, the proposed HDFC bank Centurian bank of Punjab

merger received a nod which resulted into the largest amalgamation in the

banking industry with assets worth Rs. 2 Lakh crore. The share swap ratio

was decided at 1:29. the merger is proposed to be synergistic in the retail

banking business whereas HDFC bank has a strong presence in the

corporate sector.

BODY OF THESIS

PURPOSE OF THE STUDY

A project cum Training is an essential part of MBA Curriculum. This study was

conducted on A Study of Factors affecting Personal financial planning with

special reference HDFCMutual fund in Patna.

The topic has been given by the ICFAI UNIVERSITY, DHERADUN to collect

information about current happening in the organization. It also helps to make

improvements in service and quality of the HDFCproduct & services, for their

long time existence in the market and earning profit.

Simultaneously, it is also helpful for me to learn about the consumers behaviorand their demand for the product and services, especially in financial sector in

Patna.


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NEED OF THE STUDY

Need for this study arises as there are manymarket players of these products. Therefore it

becomes necessary for any firm to know

about the performance and customer

satisfaction level. This study was done at

HDFCltd., Patna.

Implementation of the suggestion can help the

company to face the challenges posed by their

competitors and will help increase their reach

by attracting new customers.

SCOPE OF THE STUDY

This study aims to look the market potential

of product through customer survey. Outcome

of this survey will give clear picture as to

where company should focus more in order to

increase the sale of product. Investment is

need of the hour and more and more people

are opting for various Insurance policies.

With various insurance companies in the

market offering various policies, this project

will help in knowing the market for HDFC

mutual fund in particular. This project will


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help understand the customers preferences for

various FUNDS. The scope includes understanding

the peoples opinion about MUTUAL FUNDS. The

scope of this project also includes understanding the

investment criteria of individuals. Implementation of

the suggestions can help the company to face the

challenges posed by their competitors and will help

increase their reach by attracting new customers.

OBJECTIVES OF THE STUDY

PRIMARY OBJECTIVES

The primary objectives of the study are to

analyze mutual funds as an investment

alternative. This coupled with motive toknow about the fundamentals of all other

investment avenues like equity shares,

bonds, debentures, fixed income

instruments, physical assets, etc. made the

objective expand and become all- inclusive.

To understand the investment psyche of

investors, viz. the factors that drive their

investment decisions.

To understand the process of financialplanning of a client.


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To be able to suggest appropriate mutual funds to clients according to

their risk profiles and financial goals.

To conduct a risk-return analysis of mutual funds across all categories.

SECONDRY OBJECTIVES

Based on the outcome of the survey, to suggest areas in which the

company should focus more in order to enhance the sale of product.

To come up with logical and appropriate recommendations based on

the research for prospective investors.

To understand the basics of trade finance and services and retail

foreign exchange products offered by HDFC bank.

GEOGRAPHIC SCOPE

The project area was limited to the geographic limits of PATNA city. In my

research is mainly focus on only those customers who are investing in mutual

funds only the different area where from I gathered the data is boring road,

exhibition road, Patna city, kankarbagh, baily road, and the area of by-pass.

RESEARCH INSTRUMENT USED

Questionnaire, as the research instrument has been used. Questionnaire has been

designed differently for Supervisor and Managerial level.


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The questionnaire is designed according to the following points as under-

Satisfaction level of employees

Identifying the Individual

LITERATURE/REVIEW

METHODOLOGY TO BE USED:-


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Research methodology is a systematic approach of identifying the problem,

collecting the information, Analyzing the information and providing alternate

solution.For the purpose of gathering data from various dealers and consumers, I

would prefer collection of secondary data with the

help of open and close-ended questionnaires.

1. Defining the problem and research

objective:

The first step for the researcher and the

marketing manager is to define the problemcarefully and agree on the research objective. A

problem well define is half solved for this it is

necessary to fined the customer being priority,

customers want and what the company offer need

to be annualize, so as to price deliver to the

customer what he want. our major objective was

to study the market survey and sales promotional

of HDFC MUTUAL FUNDDENTIAL of Patna and

sub objective was to assists the effectiveness ofexisting market input for the company.

2. Developing the research plan:

The second stage of marketing research calls for

developing the most effective plan and design of

research. The research plan includes decision on

data sources, research approach, research

instrument, sampling plan, contact method.

COLLECTION OF DATA


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This is the most important step of the research. The whole process depends on this

step. Hence, it is very necessary to collect good, resourceful and quality data. Data

are collected from various sources. It is of two types:-

TWO TYPE OF DATA .

1. PRIMERY DATA.

2. SECONDARY DATA.

1.PRIMERY DATA:- Primary research uses various approacheslike focus groups surveys fields tells and interviewing to collect first hand

data, primary data is collected directly from respondents using data collection

methods like survey interviews, questionnaire, measurements, direct

observation or tabulation.

2.SECONDARY DATA:- Secondary data is the data that already

exists which has been collected by some other person or organization fortheir use, and is generally made available to other researcher free or at a

concessional rate. Secondary data include website, trade associations, journals,

books etc. secondary data may not always answer that specific question of a

research.

ANAL Y SIS OF DATA :- After collection of data from various

sources, all the data are analyzed and short-listed according to the nature, area and

specialization.

APPROACH


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The approach should be proper, well organized and planned. The approach

varies with the type of people to whom we are going to ask your question.

As a management trainee, we have to look for the prospective customers through

application of various tools. Such as:-

Personal Approach/Cold Convince

REPORT

Based upon the analysis and data

preparation of final report.

OVERVIEW OF THE PRIMARYRESEARCH

RESEARCH PROBLEM

To study the investment psyche of investors and to scrutinize the factors which

influence their investment choices?

TYPE OF RESEARCH

The type of research is exploratory as it aims to form hypotheses regarding factors

that influence the investment choices of people.SAMPLING DESIGN

The sample universe is the city of Patna in Bihar. Sampling unit is an individual

investor. Size of the sample is 50.


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TYPE OF SAMPLE

The sample is a Non-probabilistic sample and a convenient sample. The clients

handled by the industry guide were surveyed hence the researcher could not have

the choice of taking a systematic sample.

PRIMARY DATA COLLECTION TOOL

A questionnaire has been used to collect primary data from clients.

IN-DEPTH INTERVIEW

In-depth interview of two investment advisors were taken in order to explore the

process of financial planning of clients.

PROCESSING AND ANALYSIS OF DATA

For the analyzing the collected data, SPSS has been used. Statistics used in the

analysis includes tools like frequency distributions, co-relation, chi-square test,

one way ANOVA, variance ratio (F Test), factor analysis and Discriminant

analysis.

TESTING OF HYPOTHESIS

Certain hypothesis has been framed by the researcher regarding variables that

influence the investment choices of people. The same have been tested in theanalysis using the above mentioned tools and techniques.


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RESEARCH

PROCESS


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QUESTIONNAIREA SURVEY ON HDFC PRODUCT

DEAR SIR/MADAM,

I am a student of ICFAI national college, Patna. As a part of the

requirement for my post graduate program in management i am required

to do a research based thesis. Kindly, spend a few minutes of your

valuable time and fill in this questionnaire.

NAME OFRESPONDENT

ADDRESS..

CONTACT

NO...

Age group

18-25( )25-35( )

35-60( )


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Above 60( )

Source of income

Salary ( )

Business/profession ( )

Pension ( )

Rent from properties ( )

When do you plan to retire?

Next 5 years ( )

5- 10 years ( )

10-20 years ( )

More than 20 years ( )

Your yearly income

Less than 1 lakhs ( )

1lakh-2.5 lakhs ( )

2.5lakhs-5lakhs ( )

Above 5 Lakh ( )

Percentage of your income do you invest (yearly)?

Purposes of Investment?

Growth of money ( )

Marriage ( )

Education ( )

Adversity ( )


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I can take a small degree of risk on my investments ( )

I accept the fact that the value of my investments may reduce ( )

I can take risk on my investments ( )

Investment period

Less than 6 months ( ) 6-12 months ( ) 1-3 year ( ) 3-7 year

( )

More than 7 year ( )

Do you stay invested when the market is fluctuating?

I sell my investments when market fluctuates ( )

I dont react on small fluctuation, but Sell it on big fluctuation ( )

I keep my investments as they are ( )

Do you need your investments for sudden expenses?

Not at all ( )

I may require these funds ( )

I will definitely need these funds in emergencies ( )

REFERE NCES


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Persons

Asutosh KumarSridhar Kumar

Ashok Kumar

Nilesh Kumar

Kundan Kumar

S.K. Sanjeev

Websites

www.hdfc.co.in

www.bseindia.com

www.amfiindia.com

www.moneycontrol.com

Magazines

Portfolio organizer ICFAI Press

Business World

Business Today

Money Mantra

Newspapers:

Times of IndiaBusiness line

Economic Times
http://www.hdfc.co.in/http://www.bseindia.com/http://www.amfiindia.com/http://www.moneycontrol.com/http://www.bseindia.com/http://www.amfiindia.com/http://www.moneycontrol.com/http://www.hdfc.co.in/


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Electronic Media

CNBC AwaazZee Business

Business live


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