Project Report ON Reliance Mutual FUND S PDF

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Mutual fund analysis project...

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PROJECT REPORT ON RELIANCE MUTUAL FUND

SUBMITTED FOR THE PARTIAL FULFILLMENT OF MASTER OF BUSINESS ADMINISTRATION (INDUSTRY INTEGRATED) TO MADURAI KAMARAJ UNIVERSITY

UNDER GUIDANCE OF : Ms. SRISHTI SHARMA

SUBMITTED BY PRAVEEN KUMAR M.B.A (2nd Semester) A8750123

rbs RAI BUSINESS SCHOOL MADURAI KAMARAJ UNIVERSITY,BHOPAL YEAR : 2008-2010

PREFACE The successful completion of this project was a unique experience for me because by visiting many place and interacting various person ,I achieved a better knowledge about sales . The experience which I gained by doing this project was essential at this turning point of my carrer this project is being submitted which content detailed analysis of the research under taken by me. The research provides an opportunity to the student to devote his/her skills knowledge and competencies required during the technical session. The research is on the topic “Reliance mutual Fund ”

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ACKNOWLEDGEMENT I would like to express my appreciation and gratitude to various people who have shared their valuable time and made possible this project ,through their direct indirect cooperation . My honourable Mam Mrs. Swati Tiwari (HOD) and Mrs. Srishti Sharma (Faculty)Rai business School BHOPAL ,for allowing me to work on this project and provide necessary help. I thank my respected faculties ,dear friend & colleagues ,who help me in every possible ways , support me and encouraged me to explore new dimensions.

PRAVEEN KUMAR MBA 2nd Semester Rai Business School Bhopal

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CERTIFICATE This to certify that Ms. PRAVEEN KUMAR,M.B.A II Semester ,Rai Business School BHOPAL,Madurai Kamaraj University has done project on “Reliance Money “and has successfully completed his project on “Reliance Mutual Fund “ This report is completed under my supervision .It is only for academic purpose and is a bonafide work done by researcher .

Project Guide Mrs. Srishti Sharma FACULTY Rai Business School,BHOPAL

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DECLARATION I Priyanka Asati do here by declare that the project work entitle on the “reliance mutual Fund in India”at Bhopal is the original work done by me . This project report presented as a partial fulfillment requirement for the degree of Master of Business administration.

PRAVEEN KUMAR MBA 2nd semester Rai business School Bhopal

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1. INTRODUCTION 2. COMPANY PROFILE 3. COMPETITORS OF RELIANCE MONEY 4. NEED FOR THE STUDY 5. OBJECTIVES OF THE STUDY 6. RESEARCH METHDOLOGY 7. DATA ANALYSIS AND INTERPRETATION 8. OBSERVATION 9. FINDINGS AND SUGGESTION 10.CONCLUSION 11.LIMITATION 12.BIBLIOGRAPHY

8 15 37 39 42 43 45 51 52 54 55 56

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INTRODUCTION

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INTRODUCTION There are a lot of investment avenues available today in the financial market for an investor with an invest able surplus. He can invest in Bank Deposits, Corporate Debentures, and Bonds where there is low risk but low return. He may invest in Stock of companies where the risk is high and the returns are also proportionately high. The recent trends in the Stock Market have shown that an average retail investor always lost with periodic bearish tends. People began opting for portfolio managers with expertise in stock markets who would invest on their behalf. Thus we had wealth management services provided by many institutions. However they proved too costly for a small investor. These investors have found a good shelter with the mutual funds. Like most developed and developing countries the mutual fund cult has been catching on in India. The reasons for this interesting occurrence are: 1. Mutual funds make it easy and less costly for investors to satisfy their need for capital growth, income and/or income preservation. 2. Mutual fund brings the benefits of diversification and money management to the individual investor, providing a Opportunity for financial success that was once available only to a select few. 8

HISTORY  Unit Trust of India is the first Mutual Fund set up under a separate act, UTI Act in 1963, and started its operations in 1964 with the issue of units under the scheme US-641. In 1978 UTI was delinked from the RBI and Industrial Development Bank of India (IDBI) took over the Regulatory and administrative control in place of RBI.  In the year 1987 Public Sector banks like State Bank of India, Punjab National Bank, Indian Bank, Bank of India, and Bank of Baroda have set up mutual funds.  Apart from these above mentioned banks Life Insurance Corporation [LIC] and General Insurance Corporation [GIC] too have set up mutual fund. LIC established its mutual fund in June 1989.while GIC had set up its mutual fund in December 1990.The mutual fund industry had assest under management of Rs. 47,004 crores.  With the entry of Private Sector Funds a new era has started in Mutual Fund Industry [e.g:- Principal Mutual Fund.]

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Mutual Fund Regulations The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.

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Types of MutualFunds Scheme in India

Wide variety of Mutual Fund Schemes exist to cater to the needs such as financial position, risk tolerance and return expectations etc. The table below gives an overview into the existing types of schemes in the Industry. 

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By Structure o Open - Ended Schemes o Close - Ended Schemes o Interval Schemes By Investment Objective o Growth Schemes o Income Schemes o Balanced Schemes o Money Market Schemes Other Schemes o Tax Saving Schemes o Special Schemes  Index Schemes  Sector Specfic

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ADVANTAGES OF MUTUAL FUNDS

There are numerous benefits of investing in mutual funds and one of the key reasons for its phenomenal success in the developed markets like US and UK is the range of benefits they offer, which are unmatched by most other investment avenues.

Diversification The nuclear weapon in your arsenal for your fight against Risk. It simply means that you must spread your investment across different securities (stocks, bonds, money market instruments, real estate, fixed deposits etc.) and different sectors (auto, textile, information technology etc.). Tax Benefits Any income distributed after March 31, 2002 will be subject to tax in the assessment of all Unit holders. However, as a measure of concession to Unit holders of open-ended equity-oriented funds, income distributions for the year ending March 31, 2003, will be taxed at a concessional rate of 10.5%.

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Regulations Securities Exchange Board of India (“SEBI”), the mutual funds regulator has clearly defined rules, which govern mutual funds. These rules relate to the formation, administration and management of mutual funds and also prescribe disclosure and accounting requirements. Such a high level of regulation seeks to protect the interest of investors

Affordability A mutual fund invests in a portfolio of assets, i.e. bonds, shares, etc. depending upon the investment objective of the scheme. Azn investor can buy in to a portfolio of equities, which would otherwise be extremely expensive.

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Features related mutual funds

 Reliance was the first fund house to launch sector funds with flexibility to invest in a range of 0% to 100% in either equity or debt instruments.

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Mutual fund investments linked to an ATM/debit card a Reliance innovation India’s first longshort fund comes from Reliance Mutual Fund .

 As at 31st May 2008, more than 6.6 million people had invested in Reliance Mutual Fund;the investments comprised 16% of the country’s entire mutual fund.

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COMPANY PROFILE OF RELIANCE

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RELIANCE INDUSTRIES LIMITED Reliance Group Holdings has grown from a small office data-processing equipment firm in 1961 into a major insurance and financial-services group in one generation under one chief.

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Reliance's insurance operations constitute the nation's 27th-largest property and casualty operation. The parent company also includes a development subsidiary in commercial real estate. Reliance's international consulting group contains several subsidiaries in energy, environment, and natural resources consulting. A financial arm invests in other businesses, primarily television stations. Reliance Insurance started as the Fire Association of Philadelphia in 1817, organized by 5 hose and 11 engine fire companies. It became the nation's first association of volunteer fire departments. Business got a boost as a result of the Great Chicago Fire of 1871.The association soon developed a field of agents to write policies across the country. For the first two years, shareholders received dividends twice a year of $5 a share, which increased gradually to $10 in 1876. In 1972, the Reliance insurance group divided its pool so that Reliance Insurance Company and its subsidiaries handled most standard lines, while United Pacific Insurance Company handled the nonstandard and other operations. In 1977, the company moved into real estate, forming Continental Cities Corporation, which became Reliance Development Group, Inc. This division handled

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all real estate operations of the parent company and other subsidiaries. Reliance Capital Group, L.P. constituted the investment branch of the Reliance conglomerate. In December 1989, Reliance Capital sold its investment, Days Corporation, parent company of Days Inn of America, the world's third-largest hotel chain; it had been purchased in 1984. Reliance Industries Limited. The Group's principal activity is to produce and distribute plastic and intermediates, polyester filament yarn, fibre intermediates, polymer intermediates, crackers, chemicals, textiles, oil and gas. The refining segment includes production and marketing operations of the Petroleum refinery. The petrochemicals segment includes production and marketing operations of petrochemical products namely, High and Low density Polyethylene.

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"Growth has no limit at Reliance. I keep revising

my vision. Only when you can dream it, you can do it." Dhirubhai Ambani founded Reliance as a textile company and led its evolution as a global leader in the materials and energy value chain businesses. He is credited to have brought about the equity cult in India in the late seventies and is regarded as an icon for enterprise in India. He epitomized the spirit 'dare to dream and learn to excel'. The Reliance Group is a living testimony to his indomitable will, single-minded dedication and an unrelenting commitment to his goals. RELIANCE MUTUAL FUND This groupdominates this key areain the financial sector..This megabusiness houses show that it has assetsunder management ofRs. 90,938 crore(US$ 22.73 19

billion) andan investor base of over6.6 million (Source:www.amfiindia.com).Reliance’s mutual fundschemes are managed byReliance Capital AssetManagement LimitedRCAM), a subsidiary of Reliance Capital Limited,which holds 93.37% ofthe paidup capitalof RCAM. The company notchedup a healthy growth ofRs. 16,354 crore(US$ 4.09 billion)in assets under management in February2008 and helped propelthe total industry-wideAUM to Rs. 565,459 crore (US$ 141.36 billion)(Source: indiainvestments.com). A sharp rise infixed maturity plans (FMPs) and collection ofRs. 7000 crore (US$ 1.75 billion) through newfund offers (NFOs) created this surge. In AUrankings, Reliance continues to be in thenumber one spot.

India's Best Offering: Reliance Mutual Fund Investing has become global. Today, a lot of countries are waking up to the reality that in order to gain financial growth, they must encourage their citizens to not only save but also invest. Mutual funds are fast becoming the mode of investment in the world. In India, a mutual fund company called the Reliance Mutual Fund is making waves. Reliance is considered India's best when it comes to mutual funds. Its investors number to 4.6 billion people. Reliance Capital Asset Management Limited ranks in the top 3 of India's banking companies and financial sector in terms of net value. 20

The Anil Dhirubhai Ambani Group owns Reliance; they are the fastest growing investment company in India so far. To meet the erratic demand of the financial market, Reliance Mutual Fund designed a distinct portfolio that is sure to please potential investors. Reliance Capital Asset Management Limited manages RMF.

Vision

And

Mission

Reliance Mutual Fund is so popular because it is investor focused. They show their dedication by continually dishing out innovative offerings and unparalleled service initiatives. It is their goal to become respected globally for helping people achieve their financial dreams through excellent organization governance and customer care. Reliance Mutual fund wants a high performance environment that is geared at making investors happy. RMF aims to do business lawfully and without stepping on other people. They want to be able to create portfolios that will ensure the liquidity of the investment of people in India as well as abroad. Reliance Mutual Fund also wants to make sure that their shareholders realize reasonable profit, by deploying funds wisely. Taking appropriate risks to reach the company's potential is also one of Reliance Mutual Fund's objectives.

Schemes To make their packages more attractive, Reliance Mutual 21

Fund created proposals called The Equity/ Growth scheme, Debt/Income Scheme, and Sector Specific Scheme. i.

Debt/Income Scheme, and Sector Specific Scheme. The Equity/ Growth scheme give medium to long term capital increase. The major part of the investment is on equities and they have fairly high risks. The scheme gives the investors varying options like, capital augmentation or dividend preference. The choices are not deadlocked because if you want you may change the options later on. Providing steady and regular income is one of the Debt/Income Scheme's primary goals. The Debt/Income scheme has in its portfolio government securities, corporate debentures fixed income securities, and bonds. returns on Sector Specific Scheme are dependent on the performance of the industry at which your money is invested upon. Compared to diversified funds this is a lot more risky and you will need to really give your time on observing the market. Although RMF is gaining good ground in the financial market, remember that they are a risk taking bunch. They give higher profit because they take a lot of risks. So, if you are faint hearted, then Reliance Mutual Fund is not for you.

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GROWTH OF RELIANCE MONEY THROUGH RECOGNITION

Growth through Recognition Reliance has merited a series of awards and recognitions for excellence for businesses and operations.

Corporate Ranking and Ratings: Reliance featured in the Fortune Global 500 list of ‘World’s Largest Corporations’ for the fourth consecutive year. 

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Ranked 269th in 2007 having moved up 73 places from the previous year. Featured as one of the world’s Top 200 companies in terms of Profits. Among the top 25 climbers for two years in a row. Featured among top 50 companies with the biggest increase in Revenues. Ranked 26th within the refining industry.

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Reliance is ranked 182nd in the FT Global 500 (up from previous year’s 284th rank). 

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PetroFed, an apex hydrocarbon industry association, conferred the PetroFed 2007 awards in the categories of “Refinery of the Year” and “Exploration & Production - Company of the Year”. Brand Reliance was conferred the “Bronze Award” at The Buzziest Brands Awards 2008, organized by agencyfaqs! Institute of Economic Studies conferred the “Udyog Ratna” award in October 2007 for contributions to the industry. Chemtech Foundation conferred the “Hall of Fame” in February 2008 for sterling contributions to the industry. Chemtech Foundation conferred the “Outstanding Achievement - Oil Refining” for work at the Jamnagar Manufacturing Division.

Petroleum Federation of India conferred the “Refinery of the Year Award - 2007” to Jamnagar Manufacturing Division  “The Plastics Export Promotion Council PLEXCOUNCIL Export Award” in the category of Plastic Polymers for the year 2006-2007 was awarded to Reliance being the largest exporter in this category.

HEALTH:-

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Jamnagar Manufacturing Division was conferred the “Golden Peacock Award for Occupational Health & Safety - 2007” by Institute of Directors. Jamnagar Manufacturing Division was conferred the “ICC Award for Water Resource Management in Chemical Industry”. Jamnagar Manufacturing Division was conferred the “Good House Keeping Award” from Baroda Productivity Council. Jamnagar Manufacturing Division was conferred the “BEL-IND” Award for the best scientific paper at the 58th National Conference of Occupational Health. Naroda Manufacturing Division was conferred the “Safety Award and Certificate of Appreciation” presented by Gujarat Safety Council & Directorate of Industrial Safety & Health, Gujarat State for the recognition of safety performance at the 29th State Level Annual Safety Conference. Dahej Manufacturing Division received “BSC 5-Star” rating from British Safety Council, UK. Dhenkanal Manufacturing Division received the “2nd Prize for Longest Accident Free Period” from the Hon’ble Minister of Labour, State of Orissa. Hoshiarpur Manufacturing Division bagged the First Prize in “Safety in Punjab”, organized by Punjab Safety Council. Patalganga Manufacturing Division won the “Gold Medal at CASHe (Change Agents for Safety, Health and Environment) Conference”. It also won the III Prize in Process Management category for 25

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Presentation on Safety through Design in chemical process industry in Petrosafe 2007 Conference. Kurkumbh Manufacturing Division won the “Greentech Safety Award silver trophy” for outstanding achievement in safety management in chemical sector. Hazira Manufacturing Division received the “TERI Corporate Environmental Award (Certificate of Appreciation)” for PET recycling project.

Nagothane Manufacturing Division received the “Shrishti G-Cube Award for Good Green Governance” from Minister for Commerce and Industry, on World Earth Day.

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Jamnagar Refinery was adjudged the winner of the “Golden Peacock National Training Award -2007”. Patalganga Manufacturing Division won the “ASTD (American Society for Training & Development) Excellence in Practice Award” for innovative practice titled Learning Function’s role as Business partner: Empowering people with Knowledge to achieve Business Goals.

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Reliance won the CNBC TV-18 instituted Jobstreet.com Jobseekers’ Employer of Choice Award.

Energy Excellence:

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Exploration & Production (E&P) Division won “The Infraline Energy Excellence Awards 2007: Hydrocarbon Columbus Award for Excellence in Petroleum Exp...