Presented by :ManikantMBA-2A

Presented to :Mr. Arun DuttaPCTE

• HSBC's origins in India date back to 1853, when the Mercantile Bank of India was established in Mumbai.

• The acquisition in 1959 by The Hongkong and Shanghai Banking Corporation Limited of the Mercantile Bank was a decisive factor in laying the foundation for today's HSBC Group.

• HSBC has given India its first ATM way back in 1987.

• The organisation's adaptability, resilience and commitment to its customers have further enabled it to survive through turbulent times and prosper through good times over the past 150 years.

• The company serves the retail and corporate customers in India. It offers its products through its 77 branches and 151 franchise outlets.

• The company was formerly known as IL&FS Invest smart Limited and changed its name to HSBC Invest Direct (India) Limited in August 2009.

To become the preferred long-term financial partner to a wide base of customers whilst optimizing stakeholders’ value.

To establish a base of 1million satisfied

customers by 2010. It will be created by being a responsible and trustworthy partner!

Mission statement

An approach to business that reflects:-ResponsibilityTransparency Ethical Behavior Respect for Employees, Clients & Stakeholder

groups.

All the products of ILFS can be broadly divided

into the following two categories:

• Online Trading Products

• Advisory Service

• Other Services

SWOT ANALYSISStrengths

• Customization

• Expertise

• One-stop-shop for all the investment needs

• Unbiased and objective advice

• Extensive reach

• Brand image

• Competitive pricing

Weaknesses

• Expensive products

• Tedious procedures

• Fund transfer

• Attrition

Opportunities

• Right time for investors to re-enter the market.

• Huge untapped market.

• Increasing number of management graduates.

• Increase the tie-ups for fund transfers .

Threats• Stiff competition

• Increasing awareness of mutual funds and ULIPs.

• Changing economic scenario in India and changes in government policies.

• Many a investors burnt their figures during the bearish market conditions

Ratio analysis

Year 2009 2008 2007

Current Assets 3298.7 2469.43 2075.54

Current Liabilities 1794.24 1114.86 980.14

Current Ratio 1.84 2.22 2.12

Quick ratio

QUICK ASSETS 2009 2008 2007

Accounts Receivable 1027.73 909.58 770.39

Cash and Cash Equivalents 792.69 121.22 86.06

Other Current Assets 8.32 1 0.91

Total Quick Assets 1828.74 1031.8 857.36

Current Liabilities 1794.24 1114.86 980.14

QUICK RATIO 1.019228 0.925497 0.874732

Gross Margin Ratio

Year 2009 2008 2007

Gross Profit 1846.1 1602.31 1505

Sales 6106.43 5208.38 4777.64

Gross Margin Ratio 30.23207 30.76408 31.50091

Net Profit Ratio

Year 2009 2008 2007

Net Profit 401.52 286.5 291.12

Sales 6106.43 5208.38 4777.64

Net Profit Ratio 6.575364 5.500751 6.093385

Operating Margin Ratio

Year 2009 2008 2007

Operating Margin 1036.44 809.69 784.68

Net Sales 6106.43 5208.38 4777.64

Operating Margin Ratio 16.97293 15.54591 16.42401

Return on Assets Ratio

Year 2009 2008 2007

Net Profit Before Tax 683.1 461.15 456.15

Total Assets 9413.18 5681.25 5274.84

Return on Total Assets Ratio 7.256846 8.117052 8.647656

Year Net Sales Trend (%)

Mar'07 4777.64 100

Mar'08 5208.38 109.02

Mar'09 6106.43 127.81

(ii) Trend of net Profit

(iii) Trend Of EPS

25

Capital Market in India

Study on IPO in India: Performance Evaluation and Investors Perception

Objectives:To evaluate can immediate performance of

an IPO be relied upon for the equity in long run.

To analyse that more the subscription of the IPO, more is the immediate performance.

To study the factors affecting IPO purchase decision of the Retail Investors

• Today’s trying economic conditions have forced difficult decisions for companies.

• Understanding investment need of investors on an ongoing basis is critical for survival.

• More than ever management needs ongoing feedback from the customers, partners and employees in order to continue to innovate and grow.

Research Methodolgy

Research Methodolgy

Contd…….

• Data Collection----Primary and Secondary Sources

Primary Data : Questionnaires. Secondary Data: Websites, Newspapers,

Journals• Tools of Analysis Percentage, Mean method, Karl Pearson’s

Coefficient of Correlation, Probable Error.

• The analysis of immediate and long term performance of 25 IPO’s which were issued from 1st January 2009 to 31st May 2010.

• For this purpose, coefficient of correlation (Karl Pearson’s coefficient of correlation) was calculated between percentage change in the issue price & list price and percentage change in the issue price & current market price of the same.

IMMEDIATE AND LONG TERM PERFOMANCE

• Co-efficient of correlation

( r) = 0.233

Probable Error of “r” = 0.6745 * ( 1 – r2 ) /√N

=0.1275

IMMEDIATE AND LONG TERM PERFORMANCE

The probable error existed at 0.1275. However degree of correlation was not significant as it was not 6 times greater than its Probable Error which was 0 .1275. As for , 6 times probable error is equal to 6 * 0.1275, gives result 0.765, Which is greater than the degree of correlation.

Inference: Therefore, it can be concluded that there is no significant correlation between immediate performance and long term performance.

IMMEDIATE AND LONG TERM PERFORMANCE

Listing Gain of 25 IPO

Long term gain of 25 IPO

SUBSCRIPTION AND IMMEDIATE PERFORMANCE

• For the purpose of this section, a total of 25 IPOs have been taken from 1st January 2009 to 31st May 2010.

• Coefficient of correlation (Karl Pearson’s coefficient of correlation) was calculated between percentage change in the issue price & list price and subscription of the same.

•

SUBSCRIPTION AND IMMEDIATE PERFORMANCE

• Co-efficient of correlation

( r) = 0.6347• Probable Error of “r” = 0.6745 * (1 – r2)/ √N

=.080

Cont….

• The probable error existed at 0.080. Thus, degree of correlation was significant as it was 6 times greater than its Probable Error which was 0 .080.

• As for , 6 times probable error is equal to 6 * 0.0238, gives result 0.48, Which is less than the

degree of correlation.• Inference: Therefore, it can be concluded that there is

significant positive correlation between Subscription and Immediate performance of the issue.

SUBSCRIPTION IN TIMES

NO. OF YEARS THE INVESTORS HAVE BEEN IN THE MARKET

N=100

AVERAGE YEARLY INVESTMENT

N=100

PRIMARY AREA OF INTEREST

N=100

TYPE OF INESTMENT

N=100

PURPOSE OF INVESTMENT

N=100

PROFESSIONAL KNOWLEDGE IN STOCK MARKET

N=100

FINANCIAL STATEMENTS

Mean = (5*7)+(4*36)+(3*24)*( 2*32)+(1*1) /100 = 3.16

N=100

BUSINESS OF COMPANYMean = (5*11)+(4*43)+(3*24)+(2*18)+(1*4)/100 = 3.39

SUPPLIERS OF COMPANY

Mean = (5*4)+(4*18)+(3*31)+(2*43)+(1*4) /100 = 2.75

Reputation of the promotersMean = (5*4)+(4*29)+(3*34)+(2*4)+(1*4) /100 = 2.95

Past growth of the industryMean = (5*10)+(4*47)+(3*22)+(2*19)+(1*2) /100 = 3.44

Future Prospects of the Industry

Mean = (5*13)+(4*31)+(3*35)+(2*21)+(1*0) /100 = 3.36

Objective of the issue

Mean = (5*6)+(4*52)+(3*30)+(2*12)+(1*0) /100 = 3.52

Price band

Mean = (5*10)+(4*65)+(3*16)+(2*8)+(1*0) /100 = 3.65

Issue size

Mean = (5*8)+(4*65)+(3*37)+(2*5)+(1*1) /100 = 3.58

Underwriter of the issuing company

Mean = (5*7)+(4*43)+(3*35)+(2*14)+(1*1) /100 = 3.41

InflationMean = (5*17)+(4*56)+(3*23)+(2*4)+(1*1) /100 = 3.86

More investment in IPO when other investments carry low interest rates

Mean = (5*25)+(4*52)+(3*17)+(2*3)+(1*3) /100 = 3.93

Legal Hassels

Mean = (5*17)+(4*19)+(3*44)+(2*17)+(1*3) /100 = 2.45

Duration for which company has been in business

Mean = (5*13)+(4*41)+(3*34)+(2*9)+(1*3) /100 = 2.67

Foreign Collaborations

Mean = (5*30)+(4*34)+(3*28)+(2*5)+(1*3) /100 = 2.98

Prevailing Trend of the market

Mean = (5*10)+(4*34)+(3*28)+(2*19)+(1*9) /100 = 3.17

IPO of an MNCMean = (5*16)+(4*53)+(3*22)+(2*7)+(1*2) /100 = 3.74

Recent IPO PerformancesMean = (5*17)+(4*20)+(3*50)+(2*10)+(1*3) /100 = 2.53

Views of Top Fund Managers

Mean = (5*25)+(4*52)+(3*19)+(2*4)+(1*0) /100 = 2.98

Ratings by a research analyst

Mean = (5*23)+(4*21)+(3*50)+(2*0)+(1*6) /100 = 2.85

Listing in a well known Stock Exchange

Mean = (5*9)+(4*27)+(3*37)+(2*25)+(1*2) /100 = 3.16

Performance of IPOs in the recent past

Mean = (5*9)+(4*28)+(3*36)+(2*26)+(1*1) /100 = 3.23

Media Advertisements

Mean = (5*4)+(4*32)+(3*39)+(2*19)+(1*6) /100 = 3.09

Market Volatility

Mean = (5*4)+(4*13)+(3*46)+(2*18)+(1*19) /100 = 3.45

FINDINGS• Immediate performance of IPO can be relied upon for the

equity in the long run is rejected. It is proved from the fact that over last 1 and Half years, there existed statistically insignificant positive correlation between percentage change in the issue price & list price of the IPO and percentage change in the issue price & current market price of the same.

• More the subscription (times of issue size) of the IPO, more

is the immediate performance, is accepted. As there existed statistically significant positive correlation between subscription (times of issue size) of the IPO and its immediate performance at the time of listing.

FINDINGS

• Investors evaluate an IPO maximum from Promoters of the company, prevailing Market Trend & Recent IPO performance & Issue Size of the IPO.

• Investors evaluate an IPO minimum from Suppliers of the company, Listing in Well Known Stock exchanges & Media Advertisements