Summer Internship Report

June 30, 2011

Problem Solving Report

Analysis of Business Management of Franchisee Department Of India Infoline Ltd

In Partial Fulfilment of the Requirement for the MBA Programme (FT):2010-12

Submitted To: Institute of Management, Nirma University

Submitted by
PANKAJ KUMAR SINGH - 101333 1|Page

Author of the Report: Organization: Address:

Pankaj Kumar Singh India Infoline Limited, Ahmedabad Second floor, Pro-mart Building opposite law Garden, Navrangpura, Ahmedabad

Project Mentor: Project Duration: Prepared For: Purpose of the Report:

Mr. Pratik Joshi 9 weeks Franchisee Department, IIFL Ahmedabad a) Analysing reasons for less brokerage Generation b) c)

Submitted To:

Prof. Pawan Kumar Chugan

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Acknowledgement
I take this opportunity to thank a few people without their help this project would have never been completed. With immense pleasure I express special and sincere thanks to

my Company Guide and mentor Mr. Pratik Joshi(Associate Vice President) IIFL Gujarat Circle for his timely guidance and encouragement throughout the course of my internship and without whose help the completion of this project would have been possible.

I would also like to thank my mentor, Prof. Pawan kumar Chugan

for his constant support and valuable suggestions during my internship.

I would also like to specially thank my company colleagues

Mr. Sachin Savla(Sales Manager) and Mr. Darpan Patel(Sales Manager) IIFL Gujarat Circle for their constant help and guidance during my internships.

I would also like to thank all the BDMs at IIFL for coI would also like to thank all the employees of Franchisee

operating with us during our internships.

division of IIFL Ahmedabad. Guidance and suggestions rendered during the course of my project and the critical evaluation of the work by them has been a valuable input in this submission.

I value each persons lively association and constructive contribution.

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Table Of Contents
Serial No. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 2.11 2.12 2.13 2.14 2.21 2.22 2.23 2.24 2.31 2.32 2.33 2.34 2.35 2.36 2.41 2.42 Topics Covered Review of Literature Organisation detail and history Corporate Structure Vision Statement Share holding pattern and Key Executives Products Offerings and sister companies IIFL Business Partners Industry Profile 7S Model SWOT Analysis Future Goals Situational Analysis Methodology Survey Elements Results Client Interaction project Results Findings Recommendations Leads generation for sales teams Data collection Problems Leads generated Recommendations Conclusions Learning from internship References Page Number 6 9 12 14 16 18 24 26 28 30 31 32 33 34 37 44 47 49 49 50 50 51 52 54 55 56 57
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2.43

Annexure

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Executive Summary
Indian stock market is one of the oldest stock market in Asia. IIFL is one of the leading broking firms in India. It offers various facilities ranging from equity to commodities to insurance. Mr Nirmal Jain is the Managing Director of IIFL. It has opened various branches all over India. Its business model is based on franchisee model in which they offer their franchisees to different franchisee. We were given task of identifying various problems that were being faced by franchisees in doing their business due to which their gross generation of brokerages were less. We conducted telephonic interview with over 300 franchisees to analyse what are the various reasons due to which there is reduction in their brokerage generation. The whole process gave us a lot of insight in understanding the partnership model of business. We also did some telephonic interview with the inactive clients. The study helped me learn a lot about several aspects of organization. The projects helped me to learn a lot about share market and how it works. It gave me a chance to peep into lives of investors and brokers, thus giving an insight about share market. I learned a lot about what goes into the mind of investors, how they think about any new investment in stock they have to make. What are the parameters which they focus while making their investment decisions. Therefore, giving me a fair idea that how investment decisions should be made.

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Part A REVIEW OF LITERATURE

Indian stock markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago. The earliest records of security dealings in India are meagre and obscure. The east India Company was the dominant institution in those days and business in its loan securities used to e transact towards the close of the 18th century. By 1830s business on corporate stocks and shares in bank and cotton presses took place in Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers recognized by banks and merchants during 1840 and 1850.The 1850s witnessed a rapid development of commercial enterprise and brokerage business attracted many men into the field and by 1860 the number of brokers increased into 60.In 1860-61 the American civil war broke out and cotton supply from United States of Europe was stopped; thus, the share mania in India begun. The number of brokers increased to about200 to 250. However, at the end of the American civil war, in 1865, a disastrous slump began (for example, bank of Bombay share which had touched Rs2850 could only be sold at Rs.87.) At the end of the American civil war, the brokers who thrived out civil war in 1874, found a place in a street (now appropriately called Dalal street) where they would conveniently assemble and transact business, In 1887, they formally established in Bombay, the Native share and stock brokers (which is alternatively known as the stock exchange) in 1895, the stock exchange acquired a premise in the same street and it was inaugurated in 1899. thus, the stock exchange at Bombay was consolidated

INDIAN STOCK EXCHANGES- AN UMBRELLA GROWTH

The Second World War broke out in 1939. It gave a sharp boom which was followed by slump. But, in 1943, the situation changed radically, when India was fully mobilized as a supply base. On account of the restrictive control on cotton, bullion, seeds and other commodities, those dealing in them found in the stock market as the only outlet for their activities. They were

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anxious to join the trade and their number was swelled by numerous others. Many new associations were constituted for the purpose and stock exchanges in all parts f the country were floated. The Uttar Pradesh stock exchange limited (1940), Nagpur stock exchanged limited (1940) and Hyderabad stock exchange limited (1944) were incorporated. In Delhi two stock exchanges-Delhi stocks and share brokers association limited and the Delhi stock and stock exchange limited were floated and later in June 1947, amalgamated into the Delhi stock exchange association limited.

TRADING PATTERN OF THE INDIAN STOCK MARKET

Trading in Indian stock exchanges are limited to listed securities of public limited companies. They are broadly divided into two categories, namely specified securities (forward list) and nonspecified securities (cash list). Equity shares of dividend paying, growth oriented companies with a paid up capital of at least Rs.50million and a market capitalization of at least Rs.100million and having more than 20,000 shareholders are, normally, put in the specified group and the balance in non-specified group. Two types of transactions can be carried out on the Indian stock exchanges 1. Spot delivery transactions for delivery and payment within the time or on the date stipulated when entering into the contract which shall not be more than 14days following the date of contract. 2. Forward transactions delivery and payment can be extended by further period of 14days each so that the overall period does not exceed 90 days from the date of the contract. A member broker in an Indian stock exchanges can act as an agent, buy and sell securities for his clients on a commission basis and l\also can act as a trader or dealer as a principal, buy and sell securities on his own account an risk, in contrast with the practice prevailing on New York a London stock exchanges, where a ember can act as a jobber or broker only. The nature of trading on Indian stock exchanges are that of age old conventional style of face to-face trading with bids and offers being made by open outcry. However, there is a great amount of effort to modernize the Indian stock exchanges in the very recent times.

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OVER THE COUNTER EXCHANGE OF INDIA (OCTEI)

The traditional trading mechanism prevailed in the Indian stock markets gave way to any functional inefficiencies, such as, absence of liquidity, lack of transparency, unduly long settlement periods and benami transactions, which affected the small investors to a great extent. To provide improved services to investors, the countrys first ringless, scripless, electronic stock exchange-OTCEI- was created in 1992 by countrys premier financial institution-unit trust of India(UTI), industrial credit and investment corporation of India , Industrial Development Bank of India(IDBI), SBI capital markets, IFCI, General Insurance Corporation and its subsidiaries and can bank financial services. Trading at OTCEI is done over the centers spread across the country. Securities traded on the OTCEI are classified into Listed securities: The shares and debentures of the companies listed on the OTC can be bought or sold at any OTC counter all over the country and they should not be listed anywhere else. Permitted securities: Certain share and debentures listed on other exchanges and units of mutual funds are allowed to be traded. Initiated debentures: Any equity holding at least one lakhs debentures of particular scrip can offer them for trading on the OTC. OTC has a unique feature of trading compared to other traditional exchanges. That is, certificates of listed securities and initiated debentures are not traded at OTC. The original certificate will be safely with the custodian. But, a counter receipt is generated out at the counter which substitutes the share certificate and is used from all transactions.

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About IIFL
The IIFL (India Infoline) group, comprising the holding company, India Infoline Ltd (NSE: INDIAINFO, BSE: 532636) and its subsidiaries, is one of the leading players in the Indian financial services space. IIFL offers advice and execution platform for the entire range of financial services covering products ranging from Equities and derivatives, Commodities, Wealth management, Asset management, Insurance, Fixed deposits, Loans, Investment Banking, GoI bonds and other small savings instruments. IIFL recently received an inprinciple approval for Securities Trading and Clearing memberships from Singapore Exchange (SGX) paving the way for IIFL to become the first Indian brokerage to get a membership of the SGX. IIFL also received membership of the Colombo Stock Exchange becoming the first foreign broker to enter Sri Lanka. IIFL owns and manages the website, www.indiainfoline.com, which is one of Indias leading online destinations for personal finance, stock markets, economy and business. IIFL has been awarded the Best Broker, India by FinanceAsia and the Most improved brokerage, India in the AsiaMoney polls. India Infoline was also adjudged as Fastest Growing Equity Broking House - Large firms by Dun & Bradstreet. A forerunner in the field of equity research, IIFLs research is acknowledged by none other than Forbes as Best of the Web and a must read for investors in Asia. Our research is available not just over the Internet but also on international wire services like Bloomberg, Thomson First Call and Internet Securities where it is amongst one of the most read Indian brokers. A network of over 2,500 business locations spread over more than 500 cities and towns across India facilitates the smooth acquisition and servicing of a large customer base. All our offices are connected with the corporate office in Mumbai with cutting edge networking technology. The group caters to a customer base of about a million customers, over a variety of mediums viz. online, over the phone and at our branches.

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History & Milestones

The India Infoline Group was originally incorporated on October 18, 1995 as Equity Research and Services Private Limited at Mumbai under the Companies Act, 1956 with Registration No. 11 93797. India Infoline Group commenced its operations as an independent provider of information, analysis and research covering Indian businesses, financial markets and economy, to institutional customers. We became a public limited company on April 28, 2000 and the name of the Company was changed to India Infoline.com Limited on May 23, 2000 and later to India Infoline Limited on March 23, 2001. In 1999, The India Infoline Group identified the potential of the Internet to cater to mass retail segment and transformed our business model from providing information services to institutional customers to retail customers. Hence we launched our Internet portal, www.indiainfoline.com in May 1999 and started providing news and market information, independent research, interviews with business leaders and other specialized features. In the year 2000, The India Infoline Group leveraged its position as a provider of financial information and analysis by diversifying into transactional, primarily for online trading in shares and securities and online as well as offline distribution of personal financial products, like mutual funds and RBI Bonds. These activities were carried on by our wholly owned subsidiaries. The India Infoline Groups broking services was launched under the brand name of 5paisa.com.

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1995 Commenced operations as an Equity Research firm 1999 Launched research products of leading Indian companies, key sectors and the economy Client included leading FIIs, banks and companies. 1999 Launched www.indiainfoline.com

2000 Launched online trading through www.5paisa.com Started distribution of life insurance and mutual fund 2003 Launched proprietary trading platform Trader Terminal for retail customers 2004 Acquired commodities broking license Launched Portfolio Management Service 2005 Maiden IPO and listed on NSE, BSE 2006 Acquired membership of DGCX Commenced the lending business 2007 Commenced institutional equities business under IIFL Formed Singapore subsidiary, IIFL (Asia) Pte Ltd 2008
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Launched IIFL Wealth Transitioned to insurance broking model 2009 Acquired registration for Housing Finance SEBI in-principle approval for Mutual Fund Obtained Venture Capital license 2010 Received in-principle approval for membership of the Singapore Stock Exchange Received membership of the Colombo Stock Exchange

Corporate Structure

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IIFLs philosophy on Corporate Governance

IIFL (India Infoline) is committed to placing the Investor First, by continuously striving to increase the efficiency of the operation well as the systems and processes for use of corporate resources in such a way so as to maximize the value to stake holders. The Group aims at achieving not only the highest possible standards of legal and regulatory compliances but also of effective management

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Audit Committee
Terms of reference & Composition, Name of members and Chairman: The Audit committee comprises Mr Nilesh Vikamsey (Chairman), Mr Sat Pal Khattar, Mr Kranti Sinha, three of whom are independent Directors. The Managing Director, the Executive Director along with the Statutory and Internal Auditors are invitees to the Meeting. The Terms of reference of this committee are as under: To investigate into any matter that may be prescribed under the provisions of Section 292A of The Companies Act, 1956 - Recommendation and removal of External Auditor and fixation of the Audit Fees. - Reviewing with the management the financial statements before submission of the same to the Board. - Overseeing of Companys financial reporting process and disclosure of its financial information. - Reviewing the Adequacy of the Internal Audit Function.

Compensation Remuneration Committee

Terms of reference & Composition, Name of members and Chairman: The Compensation / Remuneration Committee comprises Mr Kranti Sinha (Chairman), Mr Nilesh Vikamsey and Mr. Sat Pal Khattar all of whom are independent Directors. The Terms of reference of this committee are as under: - To fix suitable remuneration package of all the Executive Directors and Non Executive Directors, Senior Employees and officers i.e. Salary, perquisites, bonuses, stock options, pensions etc. - Determination of the fixed component and performance linked incentives alongwith the performance criteria to all employees of the company - Service Contracts, Notice Period, Severance Fees of Directors and employees. Stock Option details: whether to be issued at discount as well as the period over which to be accrued and over which exercisable. - To conduct discussions with the HR department and form suitable remuneration policies.

Share Transfer and Investor Grievance Committee

Details of the Members, Compliance Officer, No of Complaints received and pending and pending transfers as on close of the financial year. The committee functions under the Chairmanship of Mr Kranti Sinha, a Non-executive independent Director. The other Members of the committee are Mr. Nirmal Jain and Mr. R Venkataraman. Ms Sunil Lotke, Company Secretary is the Compliance Officer of the Company
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VISION
To become an integrated global financial service provider and assist our clients in long-term wealth creation through research based value addition and unbiased advice within an ethical framework

IIFL CSR Initiatives

In line with our vision to be the most respected company in the financial services space, we recognize the importance of contributing to and sustaining social transformation. With this end in mind, we have setup the IIFL foundation, which will work for the support and upliftment of the underprivileged sections of society. The IIFL Foundation focuses on specific areas of need such as healthcare and education, the foundation will screen and select institutions and developmental agencies which are working
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in these domains and will provide necessary aid to improve the lives of the underprivileged and help them in achieving their potential Some of the activities undertaken by the IIFL Foundation: Barsana eye camp The IIFL Foundation sponsored an eye and dental camp held in February, 2010 with the support of expert doctors and surgeons from the Bhaktivedanta Hospital in Barsana near Mathura. While over 2,600 people underwent eye tests and over 800 were selected for free eye surgery, a total of over 1,800 dental procedures like extraction, scaling and filling, among others, were performed. Team IIFL provided its whole-hearted support to this noble cause and will continue to do so in the future. Pandharpur medical camp The IIFL Foundation sponsored the Pandharpur medical camp which was held by the Bhaktivedanta Hospital in July 2010 at Pandharpur. Free medical treatment was given at 4 camp sites, to approximately 49,815 pilgrims who had come to Pandharpur during Ashadi Ekadashi. The pilgrims were treated for fever, injuries, fractures, gastroenteritis, myalagia, headache, epilepsy, malaria, respiratory infections etc, during the camp. Blood donation drive IIFL regularly organizes blood donation drives via camps at its various locations across India. Over 800 employees have participated in these camps.

Share holding Pattern

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KEY EXECUTIVES

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Product Offerings: Equities - BSE/NSE 18 | P a g e

 Derivatives NSE F&O and BSE F&O Depository Services CDSL/NSDL Commodities NCDEX/MCX

Mutual Funds
Insurance (Life and General Insurance)

IPOs
Currency Trading FEDAI

Portfolio Management Services Equities IIFL is a member of BSE and NSE registered with NSDL and CDSL as a depository participant and provides broking services in the cash, derivatives and currency segments, online and offline. IIFL is a dominant player in the retail as well as institutional segments of the market. It recently became the first Indian broker to get a membership of the Colombo Stock Exchange and is also the first Indian broker to have received an in-principle approval for membership of the Singapore Stock Exchange. IIFLs Trader Terminal, its proprietary trading platform, is widely acknowledged as one of the best available for retail investors. Investors opt for IIFL given its unique combination of superior Service, cutting-edge proprietary Technology, Advice powered by world-acclaimed research and its unparalleled Reach owing to its over 2500 business locations across over 500 cities in India. IIFL received the BQ1 broker grading (highest grading) from CRISIL. The assigned grading reflects an effective external interface, robust systems framework and strong risk management. The grading also reflects IIFLs healthy regulatory compliance track record and adequate credit risk profile. IIFLs analyst team won Zee Business Indias best market analysts awards 2009 for being the best in the Oil and Gas and Commodities sectors and a finalist in the Banking and IT sectors. IIFL has rapidly emerged as one of the premier institutional equities houses in India with a team of over 25 research analysts, a full-fledged sales and trading team coupled with an experienced investment banking team.

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The Institutional equities business conducted a very successful Enterprising India global investors conference in Mumbai in March 2010, which was attended by funds with aggregate AUM over US$5 trillion and CEOs and other executives representing corporates with a combined market capitalization of over US$500 billion. The Discover Sri Lanka global investors conference, held in Colombo in July 2010, was attended by more than 50 leading global and major local investors and 25 Sri Lankan corporates, along with senior Government officials Commodities IIFL offers commodities trading to its customers vide its membership of the MCX and the NCDEX. Our domain knowledge and data based on in depth research of complex paradigms of commodity kinetics, offers our customers a unique insight into behavioral patterns of these markets. Our customers are ideally positioned to make informed investment decisions with a high probability of success. Credit and finance IIFL offers a wide array of secured loan products. Currently, secured loans (mortgage loans, margin funding, loans against shares) comprise 94% of the loan book. The Company has discontinued its unsecured products. It has robust credit processes and collections mechanism resulting in overall NPAs of less than 1%. The Company has deployed proprietary loanprocessing software to enable stringent credit checks while ensuring fast application processing. Recently the company has also launched Loans against Gold. Insurance IIFL entered the insurance distribution business in 2000 as ICICI Prudential Life Insurance Co. Ltds corporate agent. Later, it became an Insurance broker in October 2008 in line with its strategy to have an open architecture model. The Company now distributes products of major insurance companies through its subsidiary India Infoline Insurance Brokers Ltd. Customers can choose from a wide bouquet of products from several insurance companies including Max New York Life Insurance, MetLife, Reliance Life Insurance, Bajaj Allianz Life, Birla Sunlife, Life Insurance Corporation, Kotak Life Insurance and others.

Wealth Management Service IIFL offers private wealth advisory services to high-net-worth individuals (HNI) and
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corporate clients under the IIFL Private Wealth brand. IIFL Private Wealth is managed by a qualified team of MBAs from IIMs and premier institutes with relevant industry experience. The team advises clients across asset classes like sovereign and quasi-sovereign debt, corporate and collateralised debt, direct equity, ETFs and mutual funds, third party PMS, derivative strategies, real estate and private equity. It has developed innovative products structured on the fixed income side. It also has tied up with Interactive Brokers LLC to strengthen its execution platform and provide investors with a global investment platform.

Investment Banking IIFLs investment banking division was launched in 2006. The business leverages upon its strength of research and placement capabilities of the institutional and retail sales teams. Our experienced investment banking team possesses the skill-set to manage all kinds of investment banking transactions. Our close interaction with investors as well as corporate helps us understands and offer tailor-made solutions to fulfil requirements. The Company possesses strong placement capabilities across institutional, HNI and retail investors. This makes it possible for the team to place large issues with marquee investors. In FY10, the team advised and managed more than 10 transactions including four IPOs and four Qualified Institutions Placements

IIFL has diversified its business in five parts namely: IIFL Wealth, Premia, Business Partners, Global investors and Flame.

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IIFL Private wealth management IIFL offers advice and execution platform for the entire gamut of financial services, from Equities and Derivatives, Commodities, Wealth management, Asset management, Insurance, Fixed deposits, Loans, Investment Banking, Government bonds and other financial instruments. IIFL Global Investors IIFL Global Investor is an electronic trading platform that allows you to trade in multiple securities around the world spread over 80 exchanges across 18 countries from a single account. You can trade stocks, ETF's, options and bonds all from one screen. Your transaction history and positions are all reported in a single statement With IIFL Global Investor, trading around the world can be simple, because you are not required to open accounts in multiple currencies as you can hold different currencies in a single multi currency cash account with IIFL Global Investor. IIFL Premia Priority Relationship Management & Investment Advisory

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PReMIA is a multi-product, customized financial environment which aims to generate superior returns for IIFL's preferred clients, by investing across varied asset classes. With PReMIA, you have access to a team that's vastly experienced and trained in different aspects of the stock market, assuring you a multi-faceted opinion for all your financial queries. Adjudging your risk profile, setting investment goals, chalking out strategies to attain all long term and short term financial objectives are just a few of the duties that we take care of. Our dedicated relationship managers & investment advisors work tirelessly studying market, presenting new opportunities, evaluating and interpreting them so that you get the best of every opportunity. Platinum class research, dedicated customer service teams coupled with easy access and complete account transparency make PReMIA a unique experience for all our Priority Clients. Business Partners Be part of our growth story. We invite you to partner with IIFL one of the best known names in the broking industry. With 2500 offices across 500 cities, we continue to expand our reach to all parts of the country. Here is your chance of being a part of this expansion process, by partnering with one of the largest and best broking houses of India. Your existing and new customers can enjoy the benefits of several investment products including equity, commodity, futures & options, depository services, mutual funds, insurance, IPOs and currency trading. As a Business Partner you can gain mileage from the goodwill, recognition, business name and reputation associated with IIFL. Also, you can be rest assured that you will receive all the necessary support required to make your business profitable and scalable. 'Knowledge is the Edge' and your clients will immensely benefit by taking the right investment decisions with our Forbes-acclaimed research, specifically catered to your clients' needs.

FLAME Financial Literacy Agenda for Mass Empowerment

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FLAME (Financial Literacy Agenda for Mass Empowerment) is an IIFL (India Infoline Group) initiative towards spreading financial literacy amongst masses to help their inclusion in the economic prosperity of India. With accelerating GDP, per capita growth as well as savings, financial literacy is more relevant and important today than ever before. While the governments emphasis on financial inclusion is to widen the reach of banking services to unbanked rural areas, we endeavor to complement the effort by helping people make the most of the available banking and financial services. Even the people who qualify as banked population have limited understanding of how to use financial products to help enhancement of financial security, building up wealth and ensuring a comfortable life post retirement, and also how to avoid frauds and losses from unscrupulous agents and ponzi schemes. The objective is to light a FLAME, which will be ignite many a flame to remove the darkness of illiteracy and steer the inclusion of the masses towards the sunshine of growth and prosperity This portal is but one of the various initiatives that IIFL plans to launch as a part of FLAME.

IIFL BUSINESS PARTNERS

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Whats in Store for Franchisee Marketing

Support to the Business Partners, in terms of providing them with various marketing materials, conducting seminars & Investor Education programs Dedicated Business Development Manager to address clients' queries

Research
World-class research reports , sector reports and updates, corporate news, announcements, technical stocks ideas on trader terminal, SMS ( Paid Service ), results updates, fundamental investment ideas covering large-cap, mid-cap and small-cap stocks Online recommendations Daily Market Mantra Report, Highlights of important events of the day, intra-day highs & lows, volume & value reports on scripts, etc. Investor News Point monthly market news letter printed for Business Partners' esteemed clients Technology Latest web and desktop version of the Trader terminal (Online Trading Platform) for BSE Cash, NSE Cash & Derivatives on one screen OR ODIN-based platform World class automated back office system Real time risk management and efficient risk management tool

Back Office
Web and application-based online back office, centralized data processing system Contract Notes through email and courier Online Ledger account, DP accounts, Trade information, etc. Ledger, Contract Notes, Trade Confirmation Report, etc. can be printed at the Business Partners office

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Why Partner with IIFL?

Get the India Infoline STAR Edge Service, Technology and Research

Advantage of being associated with brand IIFL Backing of the strong values of the India Infoline group Access to our Forbes-acclaimed research, which is done keeping in mind the requirements of our clients Dedicated Business Development Manager to handle your queries and hand-hold you in the initial phase of your business; this would include accompanying you for some meetings Wide range of product-suite to service your clients Support in terms of research, back-office solutions, marketing, employee and client training, technology, etc.

Eligibility Criteria
Minimum age - 18 years Minimum Qualification - Successfully completed Std. X Address Proofs - Voter ID, Driving License, Electricity Bill, Bank Statement Name Change Affidavit required if there is difference in the names in any of the submitted proofs Marriage Certificate required in case of married women

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INDUSTRY PROFILE
Stock Exchange
Stocks (Shares, equity) are traded in stock exchange. India has two big stock exchanges(Bombay Stock Exchange - BSE and National Stock Exchange - NSE) and few small exchanges like Jaipur Stock Exchange etc. Investor can trade stocks in any of the stock exchange in India

Stock Broker
Investor requires a Stock Broker to buy and sell shares in stock exchanges (BSE, NSE etc.).Stock Broker are registered member of stock exchange. A stock broker can register to one or more stock exchanges. Only stock brokers can directly buy and sell shares in Stock Market. An investor must contact a stock broker to trade stocks. Brokers charge commissions (brokerages) for their service. Brokerage is usually a percent of total amount of trade and varies from broker to broker.

Stock Trading
Traditionally stock trading is done through stock brokers, personally or through telephones. As number of people trading in stock market increase enormously in last few years, some issues like location constrains, busy phone lines, miss communication etc start growing in stock broker offices. Information technology (Stock Market Software) helps stock brokers in solving these problems with Online Stock Trading. Online Stock Market Trading is an internet based stock trading facility. Investor can trade shares through a website without any manual intervention from Stock Broker. In this case these Online Stock Trading companies are stock broker for the investor. They are registered with one or more Stock Exchanges. Mostly Online Trading Websites in India trades in BSE and NSE.

Major Players In Share Broker Market

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7 s model for IIFL

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Shared Values:- The Shared values of IIFL are respect and dignity for its human assets,
team based culture, high standard of business ethics and dedication to serve its customers.

Strategy:- A network of over 2,500 business locations spread over more than 500 cities and
towns across India facilitates the smooth acquisition and servicing of a large customer base. All our offices are connected with the corporate office in Mumbai with cutting edge networking technology. Its future strategy is to expand its product and offerings.

System:- IIFL follows an internal audit system to monitor its financial systems. Its daily
activities for each employee are well defined and the reporting relation is quite clear as well. They have a team based participative culture where each individual is valued.

Structure:- Franchisees are handled by respective BDMs. Each BDM has been assigned a
particular city and he has to handle all the franchisees. He has to address their problems and queries.

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Style:- The leadership at IIFL has been innovative and creative which valued its employees
and also had a customer orientation.

Staff :- Over 10,000 employees are currently working in IIFL and their average age is less
than 30 yrs. It has a young workforce which is a prerequisite for this industry. The Company has adopted progressive policies in scientific planning, acquisition, utilization, training and motivation of the team. The result of staffing planning is evident in its superior financial and operational performances. Skills:- IIFL has a potent work force with diverse skill sets. Employees from diversified fields work such as engineers, MBAs, CFAs etc.

SWOT ANALYSIS OF IIFL

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Strengths: Integrated technology platform One Stop shop Pan - India distribution network India Infoline.com and 5paisa.com have developed into brands

Weaknesses: Lack of a banking arm to complete the bank-broker-depository chain Insignificant presence in institutional Segment

Oppurtunities: Changing demographics with higher disposable income and increasingly complex

financialinstruments will drive demand for investment advisory services Rapid penetration of Internet and computers means that technology enabled financial services will gain market share

Threats: Economic slowdown/Volatile movement in indices events like 2004 & 2008 Stock markets falls will have a cascading effect on our mutual fund mobilization Increase/decrease in interest rate can affect our debt/ income fund mobilizations Future changes in personal taxation rules can impact insurance sales Increasing competition from large and particularly foreign players

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Future plans of the Company

To expand into other financial product markets

To expand their business in 2-tier and 3-tier cities

To open over 100 new branches all over india

India Infoline plans to empower its position in the institutional trading segment

To build a strong team in investment banking and private equity.

The company is also planning to set up offices in three major cities in the country

Five overseas centres within six months.

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PART B Low brokerage Generation Issue

IIFL Ahmedabad branch for Gujarat circle
Number of franchisees are over 250 Number of BDMs are 10 Average brokerages generated by each franchisee are Rs. 50,000. Average number of clients each franchisee have = 50

Situational analysis
Data from month January and February provided to us by the branch clearly showed that the average brokerages generated by franchisees were less as compared to the number of clients they had. Also the brokerages generated by them in previous months were greater than the brokerages generated by them in the last two month. To address this issue it was necessary to understand the reasons behind the low brokerage generations. Are franchisees facing any problem or they have any issues against the organisation which was not addressed yet. We also wanted to know whether BDMs/SMs regularly meet them to address their issues. Also a contest which was started for franchisees, which we wanted to know whether they are aware about it or not. What are the steps they have take for client engagement and to address the queries of franchisee. For this whether they would like to conduct any investor seminar. Also another motive of doing exercise was to get an updated address and contact details of all the franchisees.

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Brokerage generation for IIFL (Gujarat circle) was one of the emerging issue which was to be addressed.

Methodology:To find the issues that the franchisee may probably be facing, we conducted a survey for all the franchisees in the Gujarat circle. The data of all the franchisee of IIFL in Gujarat and their contact details was provided from the MIS of the company. Total franchisee in Gujarat is around 268 and we were to survey all of them. Out of these 268, we were able to survey 194 franchisee as other franchisee were non contactable either due to wrong numbers or unresponsiveness of the Franchisee. After the survey we sorted the data and found the franchisees with the brokerage generation of less than Rs. 65,000 in a year (April 2010 March 2011) for the company. We tried to find out the reason behind the less brokerage through the business development managers and then personally calling the franchisee. These efforts were mainly to increase the brokerage for the company which was expected by this research.

Expected Results:Finding out the issues and problems if any faced by the franchisee. Addressing this issues so that the brokerage generation will be increased over a period of time.

Process of Survey:Before starting the process of survey we decided that we would contact each franchisee and firstly give them information of recent contest SUMMER MANIA which was going on for
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them. We planned to use Summer Mania Contest to initiate the process of telephonic interview with them. In this way we thought that, we would be able to generate interest of the Franchisees. As we know that unless a person is interested in having a conversation no fruitful information could be collected from them.

Following are the issues which we wanted to address with the help of this survey Summer Mania Contest:Summer Mania Contest was started for franchisees in the month of March 2011. The Contest was initiated to motivate the franchisees to get more and more clients who can invest more than Rs. 50,000. Mails regarding contest were circulated but many franchisee didnt knew that such kind of contest was going on. Purpose of including it in our survey was whether investors were aware about it or not. Whether BDMs/SMs had informed their respective franchisees personally. Our aim was to create awareness regarding contest if they didnt knew about it. Terminal Limit:Terminal limit is the extra margin that each franchisee had which they could use if their client wanted to trade intra-day and he didnt have funds. We wanted to know how many franchisees are exactly aware about it and whether they use their terminal limit. It was important to know about it as it was directly concerned with the satisfaction of the clients. As many clients complaint about not being able to trade due to lack of cooperation from the franchisees. This data was important in analysing the lack of gross brokerage generation by the franchisees. Number of Segments:Segments that were available to all the franchisees were BSE, NSE, F&O. We wanted to collect information regarding in how many segments they allow their clients to trade. This was necessary to understand how effectively and more services can be provided to the clients. It was important to analyse these things as it was going to affect the trading patterns of clients. Brokerage Tracking:-

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Earlier all the franchisees could only track their Brokerages at the end of the month, since last a new facility was provided to all the franchisee in which they can track their brokerages on daily basis. Or in other words they can track it any time they wanted. Through this exercise we wanted to know whether they knew about this facility or not. Tracking of brokerages was important part of their business as they would like to know how much brokerages they have generated and how much more they would like to generate it. This was important for franchisee satisfaction. Client Interaction:Client interaction was important part of the day to day business of the franchisee as it was directly related to the client satisfaction. Client interaction helped the franchisees in knowing their client more properly so that they can address their concerns and issues more efficiently. We wanted to know how many times within a month they interact with their clients. This was important for client satisfaction. Training Requirement:Another aspect important in our whole exercise was to know whether the franchisees need any training regarding technicals or for account opening procedures. As many franchisees were not tech-savvy, we wanted to know whether they are facing any problem in operating the terminals. We also wanted to know what other kinds of training they need regarding marketing and promotional activities. This was important for creating more efficient franchisee holders so that they can work properly. It was for the empowerment of franchisees. Employee strength:Employees in organisation help in completing the work efficiently and to service the clients better. Since every franchisee had on average over 50 clients. So it would be more convenient for the franchisee as well as for client to do trading properly. Also having employees show how seriously you are interested in the business. Not only this it creates a good impression on the clients also as they know that if they face any problem during trading, people are their to help him. Investor Seminar:Investor seminars were used to be conducted to create awareness about investment and for both current clients as well as for the prospective clients. As the new contest was going on so
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it was a good time to conduct investor seminars so that new clients can attend them. It could have been used also as a marketing tool to get more and more new clients. Investor seminars are good marketing tools to attract new clients and retain old clients. It also helps in client interaction. This was important for client satisfaction and franchisee motivation.

Queries/Problems:This was the most important aspect of our whole process. In this part we were directly asking their problems and queries they had due to which their brokerages were very less. On the basis of these problems we could decide whether less brokerage generation is due to lack of support from IIFL or due lack of work done by franchisees themselves. Responsibility of having less brokerage should lie where? These things were important for both franchisee satisfaction as well as client satisfaction. Name of BDM/RM/BM:We also wanted to how often BDMs interact with the franchisees and whether franchisee even know them by name or what post they held in IIFL.

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Findings:Summer Mania Contest:-

Our findings from the survey showed that many franchisees actually werent aware that any such kind of contest was going on. That clearly showed that they are not checking their mails regularly and their BDMs have not informed them about the contest yet. We informed all the respective BDMs regarding it and made them aware that they should focus more on these
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franchisees as they are taking their business seriously. And IIFL revenues are directly dependent upon the performances of the franchisees.

Terminal Limit:-

It was nice to know that many franchisees were aware about the terminal limit and were using them to help their clients trade better. This was a positive thing for the franchisee division as more and more franchisees were aware about it.

Daily Brokerages:-

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Still many franchisees didnt know that they can track daily brokerages which clearly show that the facility was not clearly communicated to the clients. This could be a reason for less brokerage generation.

Various Segments:-

Franchisee Segment details

Segments

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BSE NSE F&O BSE,NSE BSE,F&O NSE,F&O BSE,NSE,F&O

2 20 1 24 2 40 104

This data clearly shows that the clients as well as franchisees are less interested in trading in BSE which also shows the industry trend. We decided to segregate the list of those Franchisees who were not F&O services to their clients. We contacted the respective BDMs to encourage their franchisees to use F&O for trading as it provides high gain for clients and also high brokerage generation for franchisee. This provided us an opportunity for addressing those franchisees who have less brokerage generation are not using currently F&O for trading.

Client Interaction:-

It was good to see that almost all the franchisees used to interact with the clients regularly. Those who didnt used to interact regularly, we told their respective BDMs to guide them about the benefits of client interaction.

Training Requirement:41 | P a g e

Those who required training we made arrangements in coordination with respective BDMs.

Employee Strength:-

Many franchisee didnt had employees clearly shows that in trying to reduce cost they were actually losing on brokerages.

Investor Seminar:42 | P a g e

We made all arrangements regarding conducting investor seminar for those who wanted to organise it. It was a positive sign that so many franchisees were interested in conducting the investor seminar.

Queries:-

All those franchisee who had problems we promised them that within a week we would resolve their issues in coordination with the BDMs. Most of the problems were solved within a week and rest of them were solved at a later stage.
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We actually send all the issues of the franchisees to their respective BDMs who reverted back to us specifying that they had resolved all the queries and issues franchisees had.

Following were the some of the problems/Queries: A/c opening related problems Issues relating to Bills unreachability For branch transfer Information system related issues Change of Franchisee address. Terminal limit extension Marketing Promotions related issues Training in currency and commodity market Software guidance

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Client interaction regarding online trading

As part of our summer project we were asked to contact around over 1000 clients whose margin in their DMAT account was either zero or negative. This task was more of a client interaction exercise building process. In completing this task our main focus was to understand why these clients have become inactive.

Challenges: To collect all the data To segregate the data between active clients and non active clients. To keep in loop respective franchisees of clients To understand their problems regarding operation of their DMAT accounts To contact them at an appropriate time
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 To make them understand the benefits of active trading To make them aware about their rights and responsibilities To get insight about their future goals.

Objective:To turn at least 15% of the non active clients into active clients and to address all the issues related to trading of clients and complaints if any:

Problem Solving Process:Contacting over 1000 clients would have taken a lot of time. It would have not solved the purpose of interacting with the clients. We wanted to devote as much as quality time with the clients which we can. So we decided to divide our work in three stages:-

Contact the respective BDMs/SMs of clients(First Stage) Contact the respective franchisees of clients (Second Stage) Contact the clients directly (Third Stage)

FIRST STAGE:-

We contacted all the BDMs/SMs and gave them the list of inactive clients. We requested them to revert back to us about the possibility of their clients becoming active or inactive. The purpose behind this exercise was to filter are data so that we are not wasting our time in unnecessarily calling those clients who have already applied for closing or to those who are in active since long time. All the BDMs/SMs were very helpful in this filtering process. Due to

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this filtering process are overall data got reduced to less than 400 clients from over 1000 clients. Our new data set for clients was less as compared to earlier one and also it was filtered one. We formulated our strategy of at least converting 50% of these non active clients into active clients.

SECOND STAGE:After filtering out data set of clients, we decided to distribute it to the respective franchisees to contact them about their reason for not trading and if they are facing any problem in operating their account or in trading. The reason behind asking franchisees to contact their respective clients was to make sure that the franchisees are kept in the whole process. Also they shouldnt feel that they have been bypassed in the whole process as they are partners of IIFL and their incomes were also dependent upon the trading done by their clients. The whole process was very smooth and we received good reviews from franchisees for keeping them in the whole process. Many of clients would start trading in near future were the response we got from them. Still we decided to contact all these 400 clients ourselves also in order to get more insightful and also to understand the psychology of the clients.

THIRD STAGE:-

For our final stage we called all the respective in active clients to know about their problems and issues, if any, with the IIFL. Our main objective was not to make the clients active or to make them start investing again but was to understand the reasons for their non trading. We tried to make sure that clients are very open to us and they shouldnt feel like they are talking to some who are just calling for taking margin from them. We made sure that we understand their issues and problems. We found that many of them were not trading because of the
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slowdown in the market. Many felt that time was not right for trading so thats why they were not trading. Many investors lost their money in last few months. Some of the reasons quoted by them for their non-trading are as follows:

Markets have been too volatile Market is not good for investing currently They dont have access to market They will start in near future They have issues with the franchisee They are not satisfied with the services provided by IIFL

We told them that markets will always remain volatile and they need to invest in those stocks which will give them returns in long run. For trading purpose market may seem volatile but for investment purpose the market is very stable. For those clients who didnt had access to market, we told them about our facility in which the client can call are sales representative to purchase or sell any share he wants. Not only can that he call the representative to get the information about market performance. He would also receive are daily trade calls which if he want can execute them. For those clients who had any issues with their respective franchisees, we noted them down and assured them that the appropriate action will be taken within one week. Many of the clients complained that their franchisees are trading on their account without informing them. We categorised all these cases into special category so that corrective actions can be taken regarding it. For those clients who were unsatisfied with the services provided by the IIFL, we informed them about the various new services started by it. We also informed them about the facility of trading with the help of our sales representative.

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RESULTS:-

Some of our results from the whole process are as follows: 23 clients within a week started trading 21 clients had issues, which if addressed they would start trading 97 clients said they would start trading within a month 137 clients said they would trade only if market stabilises or if they feel appropriate. Some of them said that they dont have funds to trade now.

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FINDINGS:-

Some of the franchisees are not doing enough to satisfy their clients Franchisees are not proactive on the contrary they are reactive BDMs are not guiding franchisees regarding client management. Clients data have not been updated Clients dissatisfaction regarding IIFL services Less marketing promotion is being done Client engagement plan needed

RECOMMENDATONS:-

More and more client engagement program should be conducted so that what the investors think about the IIFL service could be understood. Moreover it will establish a constant relationship with the clients. More and more marketing promotional activities should be done in order to promote the brand IIFL. BDMs/SMs should constantly be in touch with all their franchisees and to also their important clients. More and more trading calls should be provided to both franchisees and clients.

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LEADS GENERATION FOR SALES TEAM

As part of our final assignment we were asked to generate 20 hot leads of franchisees for the sales team. These leads were related to the franchisee model of IIFL. We needed to take appointment from the various franchisees of different brokers like SHAREKHAN,ICICI DIRECT,RELIANCE MONEY etc. who were interested in shifting their franchisee to IIFL.

DATA COLLECTION PROCESS:Collection of data for this task was different from are earlier tasks as we had to find the data from our own. To collect this data we referred the NSE website. Following are steps we took for collection of the data: Used NSE website to collect members detail We segregated the data on the basis of cities We converted the raw data into a structured one Prepared excel sheet for members of different broking firms. Excel sheet included Name of the franchisee, Name of the broker, Address, contact details etc.

QUESTIONNAIRE:We spent around two days in order to understand how to go about this task. We actually analysed for these two days how the other sales representatives used to make these calls. On
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the basis of our analysis and interaction with the sales representative we formulated a questionnaire form. The purpose of forming the questionnaire was that we wanted to be clear in our mind about how to go about that task. The questionnaire included general things like gross brokerage, number of clients etc. We were told by the sales representatives that the success rate would be very less and we shouldnt feel discouraged if we are not able to get the appointments. They told us to be calm and composed when we are calling to these prospective franchisees.

Following are the points we kept in are mind to ask while calling: Time duration with existing broker Clientele Active clients Average Monthly Volume No. of branch Gross Brokerage of last quarter

PROBLEMS:We faced some problems while making our calls to get appointments from the prospective franchisees. Data which we collected from the NSE website was not updated. We had to make sure that we are not calling at a time when they are busy. We had to make sure that we dont make any false promise to get the appointments. Some of the problems which we faced are as follows:-

We didnt had updated data for the contact details of franchisees Data which we collected was not updated one which resulted in many unfruitful calls Franchisees were used to be busy at some particular time
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 We were not authorised to make any commitments on our side regarding brokerage sharing. We had to make calls only between 11 to 1 Oclock and after 4 Oclock. Appointments which we collected should be convenient for both the parties.

Appointments collected

location: Mehsana Name ARPITA KAVANKUMAR PATEL SAURABH K BHAVSAR SHREE DUTTA ENTERPRISE ( Sailesh Joshi )
HEMANTKUMAR ATMARAM PATEL ARVIND MOHANLAL PATEL

Company Name HEM FINLEASE PVT. LTD. INVESTMENTOR SECURITIES LTD. MARWADI SHARES AND FINANCE LIMITED
ANAGRAM CAPITAL LIMITED SHAH INVESTOR'S HOME LIMITED

Location: Bhavnagar Name CHAITALI BHARATKUMAR KANKOSHIYA DHAVAL ARVINDBHAI GOPANI Company Name ANGEL BROKING LIMITED ANGEL BROKING LIMITED

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SHUBHAM INVESTMENT HIRJIBHAI G ITALIA M/S. PARTHA A. SHAH

ARCADIA SHARE & STOCK BROKERS PRIVATE LIMITED DEAL DEPOT EQUITIES JHAVERI SECURITIES LIMITED

Location: Junagadh Name GIRIRAJ BROKING KESHAVLAL D KAKKAD Company Name ANGEL BROKING LIMITED ANGEL BROKING LIMITED

Location Anand Name HARISHKUMAR RAMESHBHAI PATEL RASENDRA ARUNKUMAR PATEL VINOD OSWAL BROKERS PVT LTD MANOHARSINH J. MAHIDA KENT INVESTMENT Company Name JK SECURITIES PVT. LTD. MOTILAL OSWAL SECURITIES LTD. MOTILAL OSWAL SECURITIES LTD. JHAVERI SECURITIES LIMITED GEPL CAPITAL PRIVATE LIMITED

Himmatnagar Name NURJHABANU MAMON JAGDISHKUMAR SATISHBHAI PUROHIT MOHAMADMOEEN ABDULQANEE DOI Company Name SHAREKHAN LTD. ANAND RATHI SHARE AND STOCK BROKERS LIMITED BONANZA PORTFOLIO LTD.

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Borsad Name Pari Securities Company Name Marwadi Shares and Finance Ltd.

RECOMMENDATION:

Commitment should be equalized for every person. Provide the facility of free demonstrations for all.

Improvement in the opening of De-mat & contract notice procedure is required.

There should be a limited number of clients under the relationship manger. So that he can handle new as well as old customer properly.

Some promotional activities are required for the awareness of the customer.

People at young age should be encouraged to invest in stock market

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 Seminars should be held for providing information to prospective and present customers.

CONCLUSIONS:On the basis of the study it is found that India Infoline Ltd is better services provider than the other stockbrokers because of their timely research and personalized advice on what stocks to buy and sell. Infoline Ltd. provides the facility of Trade tiger as well as relationship manager facility for encouragement and protects the interest of the investors. It also provides the information through the internet and mobile alerts that what IPOs are coming in the market and it also provides its research on the future prospect of the IPO. Study also concludes that people are not much aware of commodity market and while its going to be biggest market in India. The company should also organize seminars and similar activities to enhance the knowledge of prospective and existing customers, so that they feel more comfortable while investing in the stock market.

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Part C
Learning From the summer internship

The two months spend at IIFL Ahmedabad was my first real, full time exposure to the corporate world as I didnt have any work experience prior to coming here for doing my MBA. So it was my first experience of the professional life and I am glad that it was with IIFL, one of the biggest share market broker company in India. The exposure taught me a lot of technical as well as soft skills and I think it made me a better person. The projects helped me to learn a lot about share market and how it works. It gave me a chance to peep into lives of investors and brokers, thus giving an insight about share market. I learned a lot about what goes into the mind of investors, how they think about any new investment in stock they have to make. What are the parameters which they focus while

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making their investment decisions. Therefore, giving me a fair idea that how investment decisions should be made.

Apart from these technical skills I had learned many soft skills while working on the project. The way of communication with your peers and subordinates, working under pressure to complete the project on time, building and maintaining relationship with your stakeholders were important learning from the project. In my department maintaining relationship with franchisees was considered to be the most important work. Hence apart from the technically qualified one should also be very good at public relation work.

The summer training was my first step in the corporate world and it helped to decide my future path and career.

References:-

1) http://www.indiainfoline.com

2) http://www.nseindia.com

3) http://www.bseindia.com/

4) http://www.sharekhan.com

5) http://www.angelbroking.com/

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6) http://www.sebi.gov.in/dp/indiainfo.pdf

7) http://WWW.CAPITALINE.COM

8) http://WWW.ICICIDIRECT.COM

9) http://WWW.KARVY.COM

ANNEXURE
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NAME ADDRESS FAN ID CONTEST TERMINAL LIMIT NUMBER OF SEGMENTS CMS HO QUESTIONS DAILY BROKERAGES CLIENT INTERACTION TRAINING REQUIREMENT NUMBER OF EMPLOYEES INVESTOR SEMINAR PROBLEMS YES/NO YES/NO BSE/NSE/F&O

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