10/31/2009

PORTFOLIO MANAGEMENT-
A STUDY ON NIFTY MIDCAP
50 SCRIP’S
 ABSTRACT
The title of the project is “portfolio management- A study on NIFTY midcap scrip’s. The project is based on
analyzing the nifty midcap scrip’and prepare a equity portfolio of 20 scrip’s and evaluate the performance of
portfolio for 60 days. The study is conducted on nifty midcap 50 scrip’s and data taken for study is between 1 April,
2004 to 1 June, 2009. The objectives are to prepare an optimal portfolio which gives optimal return with minimum
risk .The methodology used is conclusive research .the sample size is 50 companies .a portfolio is constructed using
20 best companies out of 50 companies using coefficient of variation .the amount invested in the portfolio is 1 crore.
The daily return of portfolio is calculated for 45 days and benchmarked the portfolio return with various indices like
nifty and sensex .The average portfolio return is 51% in a period of 2 months. The systematic risk of portfolio is
0.99 which shows that portfolio is less risky.
 ACKNOWLEDGEMENT

I express my deep sense of gratitude to faculty guide” MR. RAVI KUMAR” sir who has been a great source of
strength and inspiration at every stage of my project and I am thankful to Mr. Ravi Paturi director of ABS,
panjagutta for making all facilities available to me.

I also express my heart full thanks to “B N RATHI SECURITIES LIMITED”.

I express thanks to MR. VENAKTESHWARLU (HEAD) and his team members for providing all necessary
information.
 CONTENTS

SERIAL
TOPIC PAGE NO.
NO.
1 COMPANY PROFILE 1
2 INTRODUCTIO TO NIFTY MIDCAP 2
3 OBJECTIVES OF THE STUDY 7
4 INTRODUCTION TO PORTFOLIO MANAGEMENT 8
5 MODERN PORTFOLIO THEORY 11
6 STEPS INVOLVED IN PORTFOLIO CONSTRUCTION 13
7 PORTFOLIO CONSTRUCTION AND PORTFOLIO ANALYSIS 16
8 RESULTS AND FINDINGS 17
9 SUGGESTIONS 18
10 BIBILOGRAPHY AND ANNEXURES 19
 INTRODUCTION
COMPANY PROFILE

BRIEF HISTORY OF THE COMPANY

B.N.RATHI SECURITIES LIMITED(BNRSL) is a public limited company incorporated as per the companies
Act , 1956 in the year 1958. The company’s paid-up capital in Rs. 2.92 crores. The company acquired
membership of National Stock Exchange of India in 1995 and membership of Bombay Stock Exchange Ltd. In
the year 2008 and is also depository participant of central Depositoey Service Ltd. The company is listed at
Bombay Stock Exchange Ltd.

PROMOTERS OF THE COMPANY

Mr. B.N Rathi is the founder of the B.N Rathi Group of companies. Mr. B.N. Rathi, Graduate in Arts in 1943.He
was the Managing Director of Hyderabad chemicals & pharmaceuticals Ltd, Subsequently He was the Executive
Director of m/s M.S.K Mills Ltd from 1980 to 1982. He was also promoter and was chairman (for two terms) of
the A.P. Mahesh cooperative urban bank Ltd.

Mr. B.N.Rathi is also on the board of several companies like B.N.Rathi securities Limited, M/s BNR Udyog
Limited, M/s BNR Capital Services Pvt.Ltd, M/s Suryavanshi spinning Mills Ltd. He is also associated with
several social organization and was president of All India Maheshwari Mahasabha (a social organization of
about 100 years of standing)

PRINCIPAL ACTIVITIES & BUSINESS DESCRIPTION

The company is engaged in all spheres of stock broking which enables the company to cater to a full range of
requirements of a growing and diversified retail and institutional clientele. The services provided are as follows:-

➢ Comprehensive stock broking services on NSE Capital Market & Derivatives segments BSE cash
Segment
➢ Depository services of central depository services Ltd.
➢ IPO
➢ Internet trading

We have about 40 offices in Andhra Pradesh and other cities in India and 25 number of sub brokers.
We have track record of payment of dividend continuously for the past 4 years.
We are empanelled as approved Broker for with LIC of India and UTI Bank Ltd. For their equity
operation. We have net work communication system and connected to all branches/sub-brokers with the
latest technology of HCL VSATs which has emerged as the company forte enable BNRSL to give the
best services to its valuable clientele.
SOURCE- www.bnrsecurities.com

NIFTY MIDCAP 50

The medium capitalized segment of stock market is being increasingly perceived as an attractive investment
segment with high growth potential. The primary objective of NIFTY MIDCAP 50 INDEX is to capture the
movement of midcap segment of the market.

The NIFTY MIDCAP INDEX has a base date of JAN 1, 2004 and a base value of 1000.the constituent and the
criteria for selection judge the effectiveness of the index. Selection of index set is based on the following criteria:

• Stocks with average market capitalization ranging from Rs 1000 crore to 5000 crore at the time of
selection.
• Stocks which are not the part of derivative segment are excluded.
• Stocks which are forming the part of S&P CNX NIFTY index are excluded.

NIFTY MIDCAP 50 is computed using market capitalization weighted method, where in the level of the index
reflects the total; market value of all the stocks in the index relative to the particular base period. The method also
takes into account constituent changes in the index and importantly corporate actions such as stock splits, rights, etc
without affecting the index value.

NIFTY MIDCAP 50 represent about 3.78% of the total market capitalization as on MARCH 31,2009.The trading
volume for the last six months of all NIFTY MIDCAP 50 stocks is approximately5.41% of the traded volume of all
stocks on the NSE.

SOURCE- WWW.NSEINDIA.COM

LIST OF NIFTY MIDCAP SCRIP’S

Company Name Industry

Allahabad Bank BANKS

Alstom Projects India Ltd. POWER
Andhra Bank BANKS
Ashok Leyland Ltd. AUTOMOBILES - 4 WHEELERS
Aurobindo Pharma Ltd. PHARMACEUTICALS
BEML Ltd. ENGINEERING
Bajaj Hindusthan Ltd. SUGAR
Bombay Dyeing & Manufacturing Co. Ltd. TEXTILES - SYNTHETIC
CESC Ltd. POWER
Chennai Petroleum Corporation Ltd. REFINERIES
Corporation Bank BANKS
Divi's Laboratories Ltd. PHARMACEUTICALS
EDUCOMP SOLUTIONS SOFTWARE
GVK Power & Infrastructures Ltd. POWER
Great Eastern Shipping Co. Ltd. SHIPPING
Hindustan Construction Co. Ltd. CONSTRUCTION
Hotel Leelaventure Ltd. HOTELS
IVRCL Infrastructures & Projects Ltd. CONSTRUCTION
CEMENT AND CEMENT
India Cements Ltd. PRODUCTS
Indian Bank BANKS
Indian Hotels Co. Ltd. HOTELS
CEMENT AND CEMENT
Kesoram Industries Ltd. PRODUCTS
Lanco Infratech Ltd. CONSTRUCTION
Lupin Ltd. PHARMACEUTICALS
TELECOMMUNICATION -
Mahanagar Telephone Nigam Ltd. SERVICES
Mahindra Lifespace Developers Ltd. CONSTRUCTION
Moser Baer India Ltd. COMPUTERS - HARDWARE
MphasiS Ltd. COMPUTERS - SOFTWARE
Nagarjuna Construction Co. Ltd. CONSTRUCTION
Oracle Financial Services Software Ltd. COMPUTERS - SOFTWARE
Patel Engineering Ltd. CONSTRUCTION
Peninsula Land Ltd. CONSTRUCTION
Petronet LNG Ltd. GAS
Piramal Healthcare Ltd. PHARMACEUTICALS
Praj Industries Ltd. ENGINEERING
Punj Lloyd Ltd. CONSTRUCTION
Reliance Natural Resources Ltd. GAS
Rolta India Ltd. COMPUTERS - SOFTWARE
Shipping Corporation of India Ltd. SHIPPING
PLASTIC AND PLASTIC
Sintex Industries Ltd. PRODUCTS
Sterling Biotech Ltd PHARMACEUTICALS
Syndicate Bank BANKS
AUTOMOBILES - 2 AND 3
TVS Motor Company Ltd. WHEELERS
 Tata Chemicals Ltd. CHEMICALS - INORGANIC
Tata Tea Ltd. TEA AND COFFEE
TELECOMMUNICATION -
Tata Teleservices (Maharashtra) Ltd. SERVICES
GEMS JEWELLERY AND
Titan Industries Ltd. WATCHES
CEMENT AND CEMENT
UltraTech Cement Ltd. PRODUCTS
Vijaya Bank BANKS
Voltas Ltd. AIRCONDITIONERS
Welspun Gujarat Stahl Rohren Ltd. STEEL AND STEEL PRODUCTS

OBJECTIVES OF THE STUDY:

 To find out optimal portfolio, which will give optimal returns at a minimum risk to the investor

 To study whether the portfolio risk is less than individual risk on whose basis the portfolio are constituted.

 To analyze whether the selected portfolio is yielding a satisfactory & constant return to the investor.

SCOPE OF THE STUDY

The scope of study is limited to collecting the data published in the reports of the company and NSE website and
theoretical frame work of the data with a view to suggest solutions to various problems relating to portfolio
management.

The study includes study of only NIFTY MIDCAP segment, not whole Equity markets the other
asset classes are also not included in preparation of portfolio.

METHODOLOGY OF THE STUDY

The research methodology used for the study is CONCLUSIVE research. The data collection method used for the
study is secondary source .the data is collected from websites like www.nseindia.com, www.shci.com, and
www.bnrsecurities.com. Also the study has been carried out with reference to various standard portfolio
management books.

LIMITATIONS OF THE STUDY

 • The fulfillment of project is limited to 60 days.

• Construction of portfolio is restricted to one-asset based Model.

PORTFOLIO MANAGEMENT
MEANING OF PORTFOLIO:
“A portfolio is a collection of securities, since it is really desirable to invest the entire funds of individual or an
institution or a single security”- (http://en.oboulo.com/finance-1-category.html)
. It is essential that every security be viewed in a portfolio context. Thus it seems logical that the expected return of
the portfolio. Portfolio Analysis considers future risk and return in holding various blends of individual securities.
Portfolio expected return is a weighted average of the expected return of the individual securities, but
portfolio variance in short contrast, can be something reduced portfolio risk is because, risk depends greatly on the
co-variance among returns of individual securities. Portfolios, which are combination of securities, may or may not
take on the aggregate characteristics of their individual parts.
INTRODUCTION OF PORTFOLIO MANAGEMENT:

Portfolio Management and investment decision as a concept came to be familiar with the conclusion of
second world war when thing can be in the stock market can be liberally ruined the fortune of individual, companies,
even government’s it was then discovered that the investing in various scripts instead of putting all the money in a
single securities yielded weather return with low risk percentage, it goes to the credit of HARY MERKOWITZ,
1991 noble laurelled to have pioneered the concept of combining high yielded securities with these low but steady
yielding securities to achieve optimum correlation co-efficient of shares.

Portfolio Management refers to the management of portfolios for others by professional investment
managers it refers to the management of an individual investor’s portfolio by professionally qualified person ranging
from merchant banker to specified portfolio company.
OBJECTIVES OF PORTFOLIO MANAGEMENT:

The main objective of investment portfolio management is to maximize the returns from the investments and
to minimize the risk involved in investment. Moreover, risk in price or inflation erodes the value of money and
hence investment must provide a protection against inflation.

Secondary Objectives:
The following are the other ancillary objectives:

• Regular Return
• Stable Income
• Appreciation Of Capital
• More Liquidity
• Safety Of Investment
• Tax Benefits

Portfolio Management services helps investors to make a wise choice between alternative investments with
pit any post trading hassle’s this service renders optimum returns to the investors by proper selection of
continuous change of one plan to another plane with in the same scheme, any portfolio management must
specify the objectives like maximum return’s, and risk capital appreciation, safety etc in their offer.

(a) Debentures –partly convertible and non-convertible debentures debt with tradable warrants.
(b) Preference shares
(c) Government securities and bonds
(d) Other debt instruments

Under variable income securities:

(a) Equity Shares

(b) Money market securities like treasury bills commercial paper etc.
A portfolio manager has to decide up on the mix of securities on the basis of contract with the client
and objectives of portfolio.

NEED FOR PORTFOLIO MANAGEMENT:

Portfolio Management is a process encompassing many activities of investment in assets and securities. It is a
dynamic and flexible concept and involves regular and systematic analysis, judgment and action. The objective of
this service is to help the unknown and investors with the expertise of professionals in investment portfolio
management. It involves construction of a portfolio based upon the investor’s objectives, constrains, preference for
risk and returns and tax liability. The portfolio is reviewed and adjusted from time to time in tune with the market
conditions. The evaluation of portfolio is to be one in terms of targets set for risk and returns. The changes in the
portfolio are to be effected to meet the changing condition.

Portfolio construction refers to the allocation of surplus funds in hand among a variety of financial assets
open for investment. Portfolio theory concerns itself with the principles governing such allocation. The modern view
of investment is oriented more go towards the assembly of proper combination of individual securities to form
investment portfolio.
A combination of securities held together will give a beneficial result if they grouped in a manner to secure
higher returns after taking into consideration the risk elements. The modern theory is the view that by different
regions, in different industries or those producing different types of product lines. Modern theory believes in the
perspective of combination of securities under constraints of risk and returns.

PROCESS OF PORTFOLIO MANAGEMENT:

Portfolio management is a complex activity which may be broken down into the following steps.
➢ Specification of invest objectives & constraints
➢ Choice of the asset mix
➢ Formulation of portfolio Strategy
➢ Selection of Securities
➢ Portfolio Execution
➢ Portfolio Revision
➢ Performance Evaluation

MODERN PORTFOLIO THEORY

Risk and Return in a portfolio context
Usually the investment is not in single stock but in a combination of stocks that is called a “portfolio”. A portfolio
is defined as “mixed bag of securities”. This is best understood by taking the example of “Mutual Funds”. You
must have heard of “mutual funds” in India, like Franklin Templeton Mutual Funds, Allianz Mutual Funds, Unit
Trust of India, Kotak Mahindra Mutual Fund etc. These funds invest in:

Different industries (also called sectors)

Different time periods (also called maturities)

Different index (also called index funds)

Different units in the same industry (example in the Cement sector, ACC and Birla Cements)

Different instruments of finance – debt instruments like bond and debentures or share capital instruments like equity
share capital or preference share capital or even short-term instruments called money market instruments

The above is to spread the risk of investment but at the same time optimizing the return from the investment and not
minimizing it. Therefore we need to understand the concept of “risk” and “return” in the context of a portfolio.
Portfolio Return
The expected return of a portfolio is simply the weighted average of the expected returns of the securities
constituting that portfolio. The weights are equal to the proportion of total funds invested in each security (the total
of weights must equal to 100 percent). The general formula for the expected return of a portfolio Rp is as follows:

Rp = ∑ Aj x Rj

J=1
Where Aj is the proportion of total funds invested in security j; Rj is the expected return for the security j and m is
the total number of different securities in the portfolio. The expected return and standard deviation of the probability
distribution of possible returns for two securities are shown below:

Security A Security B

Expected return Rj 14.0% 11.5%

Standard deviation j 10.7 1.5

If equal amounts of money are invested in these two securities, the expected return of the portfolio containing two
securities namely A and B is 0.5 x 14% + 0.5 x 11.5% = 12.75%.

Portfolio Risk

The portfolio expected return is a straightforward weighted average of returns on the individual securities; the
portfolio standard deviation is not the weighted average of individual security standard deviations. We should not
ignore the relationship or correlation between the returns of two different securities in a portfolio. The ultimate
result is reduction in the total risk of the portfolio. This is the very objective of a portfolio.

Kinds of risk – diversifiable and non-diversifiable

Diversifiable or non-systemic risks
The portfolio could contain stocks of Cement, Textiles, Software and Pharmaceuticals. This is called sector
diversification. You will choose such sectors as are not having perfect correlation.

The portfolio could contain stocks of ACC, Larsen & Toubro and Dalmia Cements. This is called unit
diversification in the same sector. You will choose again such units as are not having perfect correlation. The
portfolio could contain one-year investment (bond or debenture), more than one-year investment and long-term
investment too. This is called maturity diversification. Here the relationship will rarely be perfect.

The portfolio could contain investment into equity shares, debt instruments and money market instruments. This is
called instruments diversification. Here too the relationship will not be perfect as these relate to different segments
of the Financial Markets.

All the above are examples of diversifiable risks. One can use detailed analytical study of the past trends and
knowledge about the various sectors and specific units for true diversification of stocks in a portfolio. Such
diversifiable risks are often referred to as “non-systemic risks” or “specific risks” as such risks are not thrown in by
the system.
Non-diversifiable or systemic risks
The risk which cannot be eliminated or which cannot be controlled is called as non-diversifiable risks.

Typical example of a market risk in India – Sensex crashing from 21000 odd points in early 2008 to less than 7000
points in late 2008. The markets becoming nervous on news of global recession are another example.

Total risk of a portfolio = market risk of the portfolio + specific risk of the portfolio

Concept of “Beta”
What is “Beta” of a stock?
The risk associated with a given stock can be measured either by standard deviation.
Beta is a true measure of the relative volatility of the return of a given stock in comparison with the volatility of
return of market portfolio. The higher the Beta, the higher the risk and the higher the risk premium in comparison
with the market premium and vice-versa.

Investment in Government securities is considered to be “risk free” investment. We may not agree with the
statement that they are totally risk-free. In the absence of any better alternative that is 100% risk free, this has been
accepted as “risk-free” investment. Suppose the average return from investment in Govt. securities in India say, is
6.5% p.a.

STEPS INVOLVED IN PORTFOLIO CONSTRUCTION

• To solve the BETA for 50 scrip’s (ANNEXURE-1)
• To find out the risk and return related to particular scrip’s.
• To find out coefficient of variation for 50 individual scrip’s.
• Select 20 best scrip’s out of 50 scrip’s based on coefficient of variation.
• Prepare a diversified portfolio of 20 scrip’s.
• Analyze the portfolio for 60 days.

RESULTS OF NIFTY MIDCAP 50 SCRIPS :

BETA RETUR
Company Name VALUE RISK N C.V

Allahabad Bank 0.988 87.0049 29.02527 2.99

Alstom Projects India Ltd. 1.099 53.415 35.22 1.516
Andhra Bank 1.003 50.21658 11.10415 4.522324
Ashok Leyland Ltd. 0.943 81.3613 15.05 5.4
Aurobindo Pharma Ltd. 0.7583 68.746 5.447 12.62
BEML Ltd. 0.9 136.695 53.176 2.5706
Bajaj Hindusthan Ltd. 1.22 108.894 4.863 22.388
Bombay Dyeing & Manufacturing Co. Ltd. 1.275 69.6569 27.7506 2.51009
CESC Ltd. 0.91 50.2094 23.3519 2.1501
Chennai Petroleum Corporation Ltd. 0.92 48.194 9.2713 5.1982
Corporation Bank 0.84 21.524 -3.8305 -5.619
Divi's Laboratories Ltd. 0.81 47.9223 56.6828 0.8454
EDUCOMP SOLUTIONS 1.11 142.5044 132.8454 1.0727
GVK Power & Infrastructures Ltd. 1.17 22.535 5.721 3.938
Great Eastern Shipping Co. Ltd. 1.03 58.7277 13.502 4.3493
Hindustan Construction Co. Ltd. 1.436 106.988 45.909 2.3304
Hotel Leelaventure Ltd. 0.17 100.698 40.239 2.502
IVRCL Infrastructures & Projects Ltd. 1.36 65.9914 11.021 5.9875
India Cements Ltd. 1.16 65.791 38.028 1.73
Indian Bank 0.899 59.4517 35.6804 1.6662
Indian Hotels Co. Ltd. 0.7395 61.1916 21.1066 2.899
Kesoram Industries Ltd. 1.01 60.539 33.6737 1.7978
Lanco Infratech Ltd. 1.55 89.5904 40.5112 2.2114
Lupin Ltd. 0.5528 29.651 21.8701 1.3558
Mahanagar Telephone Nigam Ltd. 0.91 35.5209 3.1134 11.4088
Mahindra Lifespace Developers Ltd. 1.055 70.0637 3.6064 19.4273

Moser Baer India Ltd. 0.9406 36.2588 15.2435 2.3786

MphasiS Ltd. 0.723 31.08644 7.9775 3.8967
Nagarjuna Construction Co. Ltd. 1.22 121.7118 49.2502 2.4712
Oracle Financial Services Software Ltd. 0.8299 31.0637 12.3232 2.5207
Patel Engineering Ltd. 0.9854 81.228 50.9735 1.5934
Peninsula Land Ltd. 1.2527 84.9164 38.3411 2.21477
Petronet LNG Ltd. 0.918 67.6504 42.8888 1.5773
Piramal Healthcare Ltd. 0.4942 32.2378 -3.0759 -10.4805
Praj Industries Ltd. 1.114 133.1714 59.4641 2.2393
Punj Lloyd Ltd. 1.3328 60.3918 12.654 4.7725
Reliance Natural Resources Ltd. 1.3616 132.4465 71.5103 1.8521
Rolta India Ltd. 1.075 91.8053 56.2591 1.6318
Shipping Corporation of India Ltd. 0.9396 37.4121 9.7926 3.8204
Sintex Industries Ltd. 0.8335 109.4362 50.7206 2.1576
Sterling Biotech Ltd 0.5422 20.1241 2.5915 7.7653
Syndicate Bank 0.9929 38.8466 20.34302 1.9095
TVS Motor Company Ltd. 0.9332 64.2414 8.8854 7.2299
Tata Chemicals Ltd. 0.8588 40.0662 19.3915 2.06617
Tata Tea Ltd. 0.6004 35.7356 18.2423 1.9589
Tata Teleservices (Maharashtra) Ltd. 0.965 23.9413 6.8805 3.4795
Titan Industries Ltd. 0.959 89.3087 59.1257 1.5104
UltraTech Cement Ltd. 0.7425 33.0767 22.9458 1.4415
Vijaya Bank 0.9989 12.4425 -2.9564 -4.2085
 Voltas Ltd. 0.9872 124.718 81.47 1.5308
109.5070
Welspun Gujarat Stahl Rohren Ltd. 1.143 5 57.4958 1.9046

SELECTION OF TOP 20 SCRIPS BASED ON COEFFICIENT OF VARIATION

BETA RETUR RAN

Company Name VALUE RISK N C.V K
Divi's Laboratories Ltd. 0.81 47.9223 56.6828 0.8454 1
EDUCOMP SOLUTIONS 1.11 142.5044 132.8454 1.0727 2
Lupin Ltd. 0.5528 29.651 21.8701 1.3558 3
UltraTech Cement Ltd. 0.7425 33.0767 22.9458 1.4415 4
Titan Industries Ltd. 0.959 89.3087 59.1257 1.5104 5
Alstom Projects India Ltd. 1.099 53.415 35.22 1.516 6
Voltas Ltd. 0.9872 124.718 81.47 1.5308 7
Petronet LNG Ltd. 0.918 67.6504 42.8888 1.5773 8
Patel Engineering Ltd. 0.9854 81.228 50.9735 1.5934 9
Rolta India Ltd. 1.075 91.8053 56.2591 1.6318 10
Indian Bank 0.899 59.4517 35.6804 1.6662 11
India Cements Ltd. 1.16 65.791 38.028 1.73 12
Reliance Natural Resources Ltd. 1.3616 132.4465 71.5103 1.8521 13
109.5070
Welspun Gujarat Stahl Rohren Ltd. 1.143 5 57.4958 1.9046 14
Syndicate Bank 0.9929 38.8466 20.34302 1.9095 15
Tata Tea Ltd. 0.6004 35.7356 18.2423 1.9589 16
CESC Ltd. 0.91 50.2094 23.3519 2.1501 17
Sintex Industries Ltd. 0.8335 109.4362 50.7206 2.1576 18
Lanco Infratech Ltd. 1.55 89.5904 40.5112 2.2114 19
2.2147
Peninsula Land Ltd. 1.2527 84.9164 38.3411 7 20

PREPARATION OF PORTFOLIO:

1) There are 20 scrip’s in a portfolio.

2) The amount invested in each scrip is Rs 5 lakhs
3) Total investment in a portfolio is RS 1 crore.
4) Equal weightage has been given to each scrip in a portfolio.
5) Portfolio is evaluated for a period of 2 months.

See Annexure 2
PORTFOLIO ANALYSIS

1) The portfolio has been analyzed for a period of 2 months. The portfolio has been analyzed on a daily basis
with respect to NIFTY MIDCAP INDEX.
2) The portfolio has been benchmarked with other indices such as BSE 100, NIFTY 50 and NIFTY JUNIOR
INDEX.
3) The systematic risk of the portfolio is 0.99 which shows that portfolio is less risky than individual stocks
and index.

SEE ANNEXURE 3

SEE ANNEXURE 4

RESULT

 The optimal portfolio has been prepared, which will give optimal returns of 36% at a minimum risk of 0.99
to the investor

 The study has found out that the portfolio risk is less than individual risk on whose basis the portfolio is
constituted.

 The selected portfolio is yielding a satisfactory & variable return to the investor.

FINDINGS

During the study, following are some of the observations that are found out:

As the market is doing well, current prices of various stocks have increased when compared to purchase
prices. Therefore, investor will get positive returns.

1. Since the term “returns” from an investment refers to the benefits that an investor receives from that
particulars investment, hence we can infer that portfolio is generating more returns when compared to
individual.

2. If risk parameter is taken in consideration, portfolio has low risk to that of individual risk.
SUGGESTIONS

Following are some of the suggestions:

1. As market is doing well, investor should wait invest now, in order to get positive returns.

2. In order to enjoy more returns, he should invest more; investor should invest in more risky securities as a

risk taker.

3. In order to get less risky, the company should include Treasury bills is one of the securities in portfolio as

the treasury bills, the least risky of financial assets, earned the lowest average annual rate of return.

4. If the company is ready to take the high risk they can choose small firm-common stock is one of the

securities in portfolio to get the higher risk,. But the company should take a long watch over the market to

get good higher returns.

5. If the investor is a risk-averse investor, then he should invest in less risky securities and enjoy normal

returns.

BIBILOGRAPHY

BOOKS REFERRED:
 • Security Analysis & Portfolio Management by PRASANNA CHANDRA, Tata McGraw hill publishers.

• Security Analysis & Portfolio Management by FISCHER D.E. & JORDAN R.J

• INVESTMENT BY BODIE KANE MARKUS.

VISITED WEBSITIES:

www.bnrsecurities.com

www.nseindia.com

www.investopedia.com

www.bseindia.com

www.economictimes.com

www.sebi.gov.in

www.moneycontrol.com

ANNEXURE

ANNEXURE 1

avinash\titan.xThere are 20 scrip’s in a portfolio.lsx

ANNEXURE 2

PORTFOLIO.xlsx

ANNEXURE 3

avinash\PORTFOLIO ANALYSIS.xlsx

ANNEXURE4

avinash\PORTFOLIO VALUES.xlsx