Karvy Training 6ns3x

A Project Study Report On Training Undertaken at KARVY STOCK BROKING LTD.

“A Comparative Study between services provided to Karvy Franchisees and other Franchisees” Submitted in Partial Fulfilment for the Award of Degree of Master of Business istration

Submitted By:

Submitted To:

Vijaya Mishra

The Director

MBA 3rd Sem.

JECRC Business School

Preface

In the present scenario, any study will not be completed without knowing practical concepts in marketplace. The studies with a practical view are a gold coin. The MBA curriculum has been designed to provide practical exposure to the future manager. The project study is necessary for the fulfilment of MBA curriculum, it provide an opportunity to the researcher to understand industry with special emphasis on the development of skills in analysis, interpretation of practical problem through application of management. Myself as a student of MBA is very fortunate to have done my report on professionally advanced topic ‘A comparative study between services provided to Karvy Franchisees and other Franchisees. The main objective of this project report is to upgrade oneself from theoretical concepts to practical environment. No doubt every situation is unique but a set of theoretical tool of knowledge, itself based on empirical foundation, can help in developing the mechanism for handling such situation. Another objective is to learn how business expands through franchisees and how are they served. The project is an act of increasing one’s knowledge and skills so that he/she can perform his/her job in a better manner. In my context, this project work has helped us not only in preparing my project but also in understanding the organisational aspect in a detailed manner. This project work is indeed a life time experience to me.

Acknowledgement

I express my sincere thanks to my project guide, Mr Yugdeep Singh, Manager, Karvy Fortune for guiding me right from the inception till the successful completion of the project. I sincerely acknowledge him for extending his valuable guidance, for literature, critical reviews of project and the report and above all the moral he had provided to me with all stages of this project. Besides him I would also like to express my thanks to all my faculty who always guided me towards the completion of project and made it a successful one.

Vijaya Mishra

Executive Summary

The main objective of this project is to understand how business can grow by providing its franchisee. This helps organisation to save its costs which would be otherwise incurred on setting another branch. Franchising is an arrangement whereby a franchiser grants franchisee, the right to sell products in exchange for some type of consideration. Franchising offers several benefits to both franchiser and franchisee. It enables a franchisee to start its business with limited capital and use the business experience of others. If a business problem arises, the franchisee can obtain guidance or advice from the franchiser at a little or no cost. Franchised outlets are generally more successful than independently owned business units. The franchiser gains fast and selective product distribution through franchise arrangements without incurring the high cost of constructing and operating its outlets. The franchiser benefits from the fact that the franchisee being the sole proprietor in most of the cases is likely to be highly motivated to succeed. Success of the franchisee means more sales which translate in to more royalties for franchiser. In the project undertaken, proper research is done on services provided by KARVY to its franchisees and same by other major players in the market and how well are they satisfied. The data for the same is majorly primary and secondary to some extent. The research is based on various factors such as security deposit, back office cost and facilities given by the franchisers. This project enabled us to carefully analyse the basis on which the franchisee is taken and provided us with an opportunity to interact with many franchisees of major broking firms.

Contents

1) Introduction to the Industry 1.1) 1.2)

Introduction to the Financial Market Financial Intermediation

2) Introduction to the Organization 2.1) About Karvy Stock Broking Limited 2.2) Board Of Directors 2.3) Mission, Vision and Quality Policy of the Company 2.4) Journey of Karvy 2.5) Different Verticals of Organization 2.6) Organizational Structure 2.7) Achievements 2.8) Karvy Fortune 2.9) Modes to become partner with Karvy 2.9.1) Franchisee 2.9.2) Remisser 2.10) Other Major Players in Market

3) Research Methodology 3.1) 3.2) 3.3) 3.4) 3.5) 3.6) 3.7)

Title of the Study Duration of the Project Objective of the Study Type of Research Sample size and method of selecting sample Scope of Study Limitations of Study

4) Facts and Findings 5) Analysis and Interpretation 6) SWOT

7) Conclusion 8) Recommendation and Suggestions 9) Appendix 10) Bibliography

Introduction to the Industry

The Indian financial services industry is in a process of rapid transformation. Reforms are continuing as part of the overall structural reforms aimed at improving the productivity and efficiency of the economy. The role of an integrated financial infrastructure is to stimulate and sustain economic growth. The Indian economy is estimated to have grown by 7.4 per cent in 2009-10. According to the latest Central Statistical Organisation (CSO) data, financial services, banking, insurance and real estate sectors rose by 9.7 per cent in 2009-10. Overall, the US$28 billion Indian financial sector has grown at around 15 percent and has displayed stability for the last several years, even when other markets in the Asian region were facing a crisis, according to Ministry of External Affairs, Government of India. This stability was ensured through the resilience that has been built into the system over time. The financial sector has kept pace with the growing needs of corporate and other borrowers. Banks, capital market participants and insurers have developed a wide range of products and services to suit varied customer requirements. The Reserve Bank of India (RBI) has successfully introduced a regime where interest rates are more in line with market forces.

India’s financial services sector will enjoy generally strong growth during coming years, driven by rising personal incomes, corporate restructuring, financial sector liberalization and the growth of a more consumer-oriented, credit-oriented culture. This should lead to increasing demand for financial products, including consumer loans (especially for cars and homes), as well as for insurance and pension products.

According to data from Bloomberg, India's market cap as a percentage of world market cap was 2.8 per cent as on December 31, 2009. In 2009, there were 21 IPOs that raised US$ 4.18 billion as compared to 36 IPOs in 2008 that raised US$ 3.62 billion. Further, according to ICICI Securities, Indian companies are likely to raise up to US$ 42.43 billion from the primary market over the next three years.

According to Madhabi Puri-Buch, Managing Director and CEO, ICICI Securities' nearly US$ 20 billion will be raised from the initial public offer (IPO) market this fiscal (2010-11), of which around US$ 8.49 billion would be from the public sector and an equal amount from private companies. Moreover, on the back of an increase in the participation of agriculture and other commodities, the 23 commodity exchanges posted 50 per cent year-on-year growth in turnover in the AprilFebruary period of 2009-10, to touch US$ 1.53 trillion, according to the commodity markets regulator, Forward Markets Commission (FMC).

The average assets under management of the mutual fund industry stood at US$ 170.46 billion for the month of May 2010, as compared to US$ 135.58 billion in May 2009, according to the data released by Association of Mutual Funds in India (AMFI).

FINANCIAL MARKETS A Financial Market can be defined as the market in which financial assets are created or transferred. As against a real transaction that involves exchange of money for real goods or services, a financial transaction involves creation or transfer of a financial asset. Financial Assets or Financial Instruments represents a claim to the payment of a sum of money sometime in the future and /or periodic payment in the form of interest or dividend. Money Market- The money market ifs a wholesale debt market for low-risk, highly-liquid, shortterm instrument. Funds are available in this market for periods ranging from a single day up to a year. This market is dominated mostly by government, banks and financial institutions.

Capital Market - The capital market is designed to finance the long-term investments. The transactions taking place in this market will be for periods over a year. Forex Market - The Forex market deals with the multicurrency requirements, which are met by the exchange of currencies. Depending on the exchange rate that is applicable, the transfer of funds takes place in this market. This is one of the most developed and integrated market across the globe. Credit Market- Credit market is a place where banks, FIs and NBFCs purvey short, medium and long-term loans to corporate and individuals.

Constituents of a Financial System

FINANCIAL INTERMEDIATION

Having designed the instrument, the issuer should then ensure that these financial assets reach the ultimate investor in order to garner the requisite amount. When the borrower of funds approaches the financial market to raise funds, mere issue of securities will not suffice. Adequate information of the issue, issuer and the security should be ed on to take place. There should be a proper channel within the financial system to ensure such transfer. To serve this purpose, Financial intermediaries came into existence. Financial intermediation in the organized sector is conducted by a widerange of institutions functioning under the overall surveillance of the Reserve Bank of India. In the initial stages, the role of the intermediary was mostly related to ensure transfer of funds from the lender to the borrower. This service was offered by banks, FIs, brokers, and dealers. However, as the financial system widened along with the developments taking place in the financial markets, the scope of its operations also

widened. Some of the important intermediaries operating ink the financial markets include; investment bankers, underwriters, stock exchanges, registrars, depositories, custodians, portfolio managers, mutual funds, financial rs financial consultants, primary dealers, satellite dealers, self regulatory organizations, etc. Though the markets are different, there may be a few intermediaries offering their services in move than one market e.g. underwriter. However, the services offered by them vary from one market to another.

Intermediary Stock Exchange

Market Capital Market

Role Secondary Market to securities

Investment Bankers

Capital Market,

Corporate advisory

Credit Market

services, Issue of securities

Underwriters

Capital Market,

Subscribe to

Money Market

unsubscribed portion of securities

Registrars,

Capital Market

Issue securities to the

Depositories,

investors on behalf of

Custodians

the company and handle share transfer activity

Primary Dealers

Money Market

Satellite Dealers Forex Dealers

Market making in government securities

Forex Market

Ensure exchange ink currencies

Introduction to the Organisation

Karvy Stock Broking Limited KARVY is a premier integrated financial services provider and ranked among the top five in the country in all its business segments. It services over 16 million individual investors in various capacities and provides investor services to over 300 corporate. It is a member of all three: National Stock Exchange (NSE)  Bombay Stock Exchange (BSE)  Hyderabad Stock Exchange (HSE) Karvy utilized its experience and superlative expertise to capitalize on its strengths and better its service, innovate and provide new ones. It diversified in the process and thus evolved as India’s premier integrated financial service enterprise. Karvy has been a customer centric company since its inception. It offers a single platform servicing multiple financial instruments in its bid to offer complete financial solutions to the varying needs of both corporate and retail investors, where an extensive range of services are provided with great volume-management capability. KARVY covers the entire spectrum of financial services such as Stock broking, Depository Participants, Distribution of financial products - mutual funds,bonds, fixed deposit, equities, Insurance Broking, Commodities Broking, Personal Finance Advisory Services, Merchant Banking & Corporate Finance, placement of equity, IPOs, among others. Karvy has a professional management team and ranks among the best in technology, operations and research of various industrial segments.

BACKGROUND The flagship company, Karvy Consultants Limited was found with the vision and enterprise of a group of practicing Chartered ants on a modest scale in 1981 in Hyderabad, where it now has 13 branches.The name KARVY is actually the Initials of their names.

K - Mr. Kutumb Rao A- Mr Ajay Kumar R- Mr. Ramaswamy V-Mr. Venkat Naidu Y-Mr. Yugandhar

It initiated with just one activity and later carved roads into fields of registry and share ing as well. From then there was no stopping at all. A decade of commitment, professional integrity and vision helped Karvy achieve a leadership position in its field. It is known to handle the largest number of issues ever in the history of the Indian stock market in a particular year. Thereafter, Karvy made inroads into a host of capital market services, corporate and retail which proved to be a sound business synergy. Today Karvy has access to millions of Indian shareholders, besides companies, banks, financial institutions and regulatory agencies. Over the past one and half decades, Karvy has involved as a veritable link between industry, finance and people. An ISO 9002 company, Karvy’s commitment to quality and retail reach has made it an integrated financial services company. A SEBI category 1 registrar, so far Karvy has handled

over 675 issues as Registrars to public issues, processed over 52 million applications and is servicing over 16 million investors from various locations spread over 205 cities.

Board of Directors

Mr. C Parthasarathy, a leader in the financial services industry in India is responsible for building Karvy as one of India's truly integrated Financial Services Provider; he is a fellow member of the Institute of Company Secretaries of India, a Fellow Member of the Institute of Chartered ants of India and a graduate in law. As Chairman, he oversees the group's operations and renders vision and business direction. His ion and vision for achieving leadership in the business made KARVY a leading financial intermediary ranking them as number one in the registrar, Share Transfer and IPO Distribution businesses. He also holds directorship in Karvy Stock Broking Limited, Karvy Investor Services Limited, Karvy Computershare Private Limited, Karvy Comtrade Limited, Karvy Insurance Broking Pvt Ltd.

Mr. M Yugandhar, Managing Director, founder member of Karvy Consultants Limited, has varied experience in the field of financial services spanning over 20 years. He is a Fellow Member of the Institute of Chartered ants of India and was involved in the statutory and branch audit of banks for 26 years.

Mr. M S Ramakrishna, Director, founder member of Karvy Consultants Limited is orchestrator of technology initiatives such as the call center in the service of the customer. Mr. Ramakrishna is a member of the Hyderabad Stock Exchange and is the director of Karvy Stock Broking Limited, Karvy Investor Services Limited, Karvy Computershare Private Limited, Karvy Comtrade Limited, Karvy Insurance Broking Pvt Ltd. He has helped Karvy diversify into the field of medical transcription leveraging on the company's core competency of transaction processing. He has more than 20 years of experience in the financial services arena.

Mr. Prasad V Potluri, Director, is an entrepreneur of repute in the IT professional services arena. In June 1996, he founded "Procon" building the organization into one of the fastest growing IT services players in the US with 225 employees and revenues of $22m in 27 months. He successfully merged the company with RCM for $32m in November 1998. In 2000, he founded ' Albion Orion Company', a roll up in IT services sector in the US.

Karvy’s Mission: “ Our mission is to be a leading and preferred service provider to our customers, and we aim to achieve this leadership position by building an innovative, enterprising, and technology driven organization which will set the highest standards of service and business ethics ”.

Vision of Karvy: To achieve & sustain market leadership, Karvy shall aim for complete customer satisfaction, by combining its human and technological resources, to provide world class quality services. In the process Karvy shall strive to meet and exceed customer's satisfaction and set industry standards.

QUALITY POLICY: To achieve and retain leadership, Karvy aims for complete customer satisfaction, by combining its human and technological resources, to provide superior quality financial services. In the process, Karvy strives to exceed Customer's expectations.

As per the Quality Policy, Karvy will: •

Build in-house processes that will ensure transparent and harmonious relationships with its clients and investors to provide high quality of services.

•

Establish a partner relationship with its investor service agents and vendors that will help it in keeping up to its commitments to the customers.

•

Provide high quality of work life for all its employees and equip them with adequate knowledge & skills so as to respond to customer's needs.

•

Continue to uphold the values of honesty & integrity and strive to establish unparalleled standards in business ethics.

•

Use state-of-the art information technology in developing new and innovative financial products and services to meet the changing needs of investors and clients.

•

Strive to be a reliable source of value-added financial products, services and constantly guide the individuals and institutions in making a judicious choice of same.

•

Strive to keep all stake-holders (shareholders, clients, investors, employees, suppliers and regulatory authorities) proud and satisfied.

Achievements: •

Among the top 5 stock brokers in India (4% of NSE volumes)

•

India's No. 1 Registrar & Securities Transfer Agents

•

Among the top 3 Depository Participants

•

Largest Network of Branches & Business Associates

•

Among top 10 Investment bankers

•

Largest Distributor of Financial Products

•

Adjudged as one of the top 50 IT uses in India by MIS Asia

•

Fully Fledged IT driven operations

KARVY MILESTONES Karvy has travelled a success route over the past 20 years and positioned itself as an emerging financial service giant in which embeds the confidence and of enviable patrons across the financial world. Patrons are also of diversified fields which includes over 16 million individual investors in various capacities and 300 corporate comprising the best out of the whole lot .Years of experience of holistic financial services and expertise in this industry has helped it gain the status it enjoys and cherishes today.

Journey of Karvy: Success Year after Year Year

Addition

1979-1980

Karvy and Company

1981-1982

Karvy Consultants Ltd

1985-1986

Foray into capital markets as registrars and transfer agents.

1987-1988

First branch at Mumbai

1988-1989

Stock broking

1990

Entry into retail stock broking

1992

Set up investor service centers

1993

Financial Products Distribution

1994

Entry into Mutual Fund Services

1995

Corporate Finance and Investment banking

1997

First Registrar in the country to be awarded ISO 9002

1999

IT enabled service - BPO

2000

E – Business www.karvy.com

2001

Insurance and Launch of retail arm Karvy the Finapolis – Your Personal Finance Advisor

2002

Launch of PCG

2003

Commencement of Secondary Debt and WDM trading

2004

JV with Computer share Limited , Australia Launch of Karvy Global Service Karvy Comtrade

2005

Karvy Insurance Broking Pvt. Ltd.

2006

Karvy Realty & Services (India) Limited – KRSL

2007

Karvy Fortune , Funding by ICICI Ventures Ltd., Barings Asia

2008

Karvy Private Wealth

2009 Karvy Data Management Services Ltd Karvy Financial Services Ltd

Milestones to be achieved in future:

•

To set up its own Asset Management Company

•

To set up its own Bank by 2012

Karvy Group of Companies As discussed earlier, KARVY offers a single platform servicing multiple financial instruments in its bid to offer complete financial solutions to the varying needs of both corporate and retail investors. The range of products and services are provided by the following wings.

1)

Karvy Consultants Limited:

This is the flagship company of Karvy Group and it controls the organizational affairs, channels of progress, work affairs and pioneering business policies. This was the first business the KARVY group ventured into, but now they have transferred it into a t venture with computer share limited of Australia, the world’s largest registrar. This company services around 6 lakh customer s in a spread of 250 cities/towns in India.

2) Karvy Stock Broking Limited

It is undisputable fact that the stock market is unpredictable and volatile, but despite this KSBL enjoys a high success rate as a wealth management option. Karvy Stock Broking Limited offers services that are much beyond serving just as a medium for buying and selling stocks and

shares. Instead it provides multi dimensional and multi focused services. It offers trading facilities for National Stock Exchange, Bombay Stock Exchange and Hyderabad Stock Exchange and tries to make trading safe to maximum possible extent. It also offers special portfolio analysis packages that provide daily technical advice on scrips for successful portfolio management. It provides customized advisory services to help the client make right financial moves which specifically suits their portfolios.

3) Karvy Computershare Limited

Karvy Computershare Limited This wing of Karvy has traversed wide spaces to tie up with the world’s largest transfer agent, the leading Australian company Computershare Limited. This company services more than 75 million shareholders across 7000 clients and makes its presence felt in over 12 countries across 5 continents. It has also entered into a 50-50 t venture with Karvy. After transferring completely to this new entity it has tried to enrich the financial services industry as a whole. The worldwide network of Computershare helps it to adapt to the international standards in addition to leveraging the best technologies from all over the world.

4) Karvy Comtrade Limited

Karvy Commodities focuses on taking commodities trading to new dimensions of reliability and profitability. They have made commodities trading, an essentially age-old practice, into a sophisticated and scientific investment option. It helps in enabling trade in all goods and products of agricultural and mineral origin that include lucrative commodities like gold and silver and popular items like oil, pulses and cotton through a well-systematized trading platform.

5) Karvy Insurance Broking Limited:

Karvy Insurance Broking Pvt. Ltd., provides both life and non-life insurance products to retail individuals, high net-worth clients and corporates. With the opening up of the insurance sector and entry of a large number of private players in the business, it is in a position to provide tailor made policies for different segments of customers.

6) Karvy Investor Services Limited:

This wing of Karvy is ed with SEBI as a category 1 merchant banker and is also recognized as a leading merchant banker of the country. It has built its reputation by capitalizing the opportunities as and when it comes, be it in corporate consolidations, mergers and acquisitions or corporate restructuring. Involvement in raising resources for corporate or government undertaking successfully over the past two decades has given it a tremendous confidence boost.

7)

Karvy Data Management Services Limited:

Started in 2008,Karvy Data Management Services is the domestic BPO arm of the Karvy Group and services corporate across various industry verticals and business horizons. KDMSL is

emerging as a leading service provider in the areas of E-governance processing, insurance back office processing, record keeping, back office for BFSI clientele and is in pursuit to establish credentials in the areas of Telecom processing, Data management requirements of large corporate.

8)

Karvy Global Services:

Karvy Global Services is a knowledge services company. It provides specialist resources to extend in house analyst teams in driving clear business results. It serves investment banks, insurance providers, brokerages, hedge funds, research agencies, and life settlement providers across the United States, Middle East, and Europe. Their areas of focus include equity and industry research, commodity research, credit analytics, technology-based workflow solutions, insurance policy and portfolio valuation, and other specialized services.Incorporated in 2004, The Company is backed by over 25 years of experience through India’s largest financial services company, the Karvy Group. It is located in New York and have primary global delivery centre in Hyderabad, India.

9)

Karvy Finance:

Karvy Financial Services Ltd. is a wholly owned subsidiary of Karvy Stock Broking Ltd .It was established in the year 2009.KARVY Group, a pioneer in financial services in India, has forayed

into retail finance space with its Non Banking Financial Corporation (NBFC) – Karvy Financial Services Ltd or Karvy Finance. Karvy Finance has a vision to be the “Category Champion” for Retail Finance in India. Karvy Finance aims to offer a complete bouquet of financial services products to its customers with secured and unsecured lending products (such as loans against securities, loans against property and personal/business loans).

10)Karvy Realty India Limited:

Karvy Realty (India) Limited (KRIL) is promoted by the Karvy Group, India’s largest financial services group. The group carries forward its legacy of trust and excellence in investor and customer services delivered with ion and the highest level of quality that align with global standards. Karvy Realty (India) Limited is engaged in the business of real estate and property services offering: •

Buying/ selling/ renting of properties

•

Identifying valuable investments opportunities in the real estate sector

•

Facilitating financial for real estate and investments in properties

•

Real estate portfolio advisory services.

11)Karvy Fortune:

From the year 2007.Karvy Stock Broking Limited started offering its franchisee through Karvy Fortune, a separate vertical which would handle all the matters related to franchisees. It provided opportunities for the franchisees to hands with the company that is ranked among top five in the country in all its business segments. Karvy Franchisees are provided with of highly qualified and dedicated professionals. Karvy provides the complete backing of its research. Armed with these invaluable inputs, customers can take right investment decisions. Karvy Stock Broking Limited has over 1000 franchisees all over India and around 10 in Rajasthan.

Organisational Structure

Karvy Fortune

Karvy Stock Broking is expanding it’s business in all over India to reach corner customers of India, Karvy has deputed Karvy Fortune in 2007, It is carved to reach like-minded people who wish to serve the customers with utmost reliability and fervor. A Business Associate of Karvy will actively promote and market Karvy’s services and products and keeps customers updated of the forthcoming new products and schemes. Karvy is a pioneer financial services provider in India and has operations in segments such as stock, commodities and insurance broking, investment banking, mutual funds distribution and depository services. Any Individual from India can Karvy Family” as Franchisee, Remisser or as an Independent Financial Advisor.

Why Karvy? Karvy Stock Broking Ltd ranks among top 5 stock brokers in India, it ranks among top 5 Depositary Participants in India, with the huge net work of over 500 branches in 375 locations across India and overseas at Dubai, executes 150,000+ trades in NSE/BSE. Karvy has a top notch research team, advisory team, cutting edge technology team to serve it’s customers in 24/7 manner. Also there are few facts as below: •

Every 50th Indian is serviced by KARVY

•

Every 20th trade in stock market is done through KARVY

•

Every 6th Investor in India invests through KARVY

•

India’s No.1 Registrar and Transfer Agent:KARVY

•

Every 10th Demat is held at KARVY

Ways to become Business Partners with Karvy

One who is interested to associate with Karvy can do it in two ways. Either he can become a franchisee or a remisser. Karvy offers excellent services to its business associates in form of sharing and other facilities. In addition to it, there are various add-on services that help business associates to generate more revenue. Firstly we will discuss about associating with Karvy as a Franchisee.

Franchisee:

What is franchising? Franchising is an arrangement whereby a franchiser grants franchisee, the right to sell products in exchange for some type of consideration. Their are two parties to it namely franchisee (An individual who purchases and runs a franchise) and franchisor (from whom the franchise is purchased)

Who can take franchise?  Has the capacity to invest in infrastructure.  Have ready clientele base.  Have start-up capital to invest.  Wants to invest full time to business.  Wants tool to service and clients.

Associating with Karvy as a franchisee: This concept essentially talks about appointing PARTNERS for KARVY across the nation to conduct the broking (stock and commodities) and distribution business. These franchisees would have to maintain the corporate standard infrastructure, look and feel, service delivery and other aspects and function just like KARVY branches

Benefits of Associating with Karvy:

 Leading Stock Broker  Leading IPO Distributor  Leading Mutual Funds Distributor  Leading Depository Participant  Strong Brand Recognition  Diversified Product Offerings  Quality Research  Strong Service  Strong Branch Network

Eligibility Criteria to become a franchisee:

1. An individual/ company/ partnership firm with good track record & reputation in financial

services/other business/social circles with a good client base. 2. Sub-broker registration in SEBI/Exchanges through KSBL is compulsory without which the remittance of accrued brokerage to franchisee will be kept on hold till registration is complete.

3. Capacity to invest in setting up & maintaining the infrastructure & manpower required for carrying on the business as specified below at their own expense. a. Own or leased premises with requisite power supply and facilities Including LAN duly approved by KSBL in writing; b. Interior work, furniture and Name Board conforming to the design, colours and Standards approved by KSBL c. Connectivity and communication facilities including leased line, ISDN line, Telephone line etc duly approved by KSBL.

d. Legally licensed operating system, database and other software including back- office software required for the operations at franchisee’s premises; e. Any other equipment or installations necessary for carrying on the business without interruption. 4. The sub-broker/ employees of corporate/firm should hold valid NCFM certificates for Cash, F&O and ensure that NCFM certificate holder in person has to sit on trading terminals in whose name the terminal ID has been generated.

Business Partner Package offered by Karvy:

1. Product : Broking through BSE (Cash & F&O), NSE (Cash & F&O), DP services through NSDL, CDSL.

2. Sales : A Relationship Manager will be assigned to you for regular Research advice & Market Updates through Chat/Phone/Emails/Personal meetings.

3. Business Development: Product research, marketing & business development on a regular basis to encourage knowledge based selling.

4. Back Office : Centralized Web based back office through a dedicated Customer Service Executive assigned to you for routine queries through Chat-Phone- Emails. All stationary items bills, letter heads will be provided by KSBL and digital contract notes will be delivered to the remisser id as per charges applicable.

5. Setup : Initial Glow sign flex material & Initial Visiting Cards will be provided by KSBL.

Commercial & Conditions

For Franchisees:

1. Refundable Deposits: Total INR 250,000/a. INR 150,000/- with KSBL (Equities) b. INR 100000/-for commodities (additional)

2. Registration Charges: INR 27500/-

3. Revenue Sharing: BROKERAGE SHARING RATIO (EQUITY) KSBL: 40% BUSINESS PARTNER: 60%

4. Minimum Brokerage to be charged to end clients: Segment Type Brokerage Rate Applicable

Cash Segment (BSE & NSE) Trading 0.04% on Turnover Derivative Segment (F&O & Commodities) Trading 0.04% on Turnover Cash Segment (BSE & NSE) Delivery 0.40%

5. Back Office Cost: INR 1500 per month

Facilities offered in the package:

•

2Km Area: In order to reduce competition between the franchisees of the same company, Karvy has come out with the policy that it would not give any franchisees within 2km area once it has given there.

•

Client Database: The Company would provide database of those clients who are somehow dealing with Karvy but are not trading through it. This database helps franchisees to tap those clients and grow their business.

•

Cheque Punching Facility: The Company authorises its franchisees to punch the client’s cheque and increase their trading limit hand to hand rather than going to branch office for the same.

Services provided to Franchisees:

•

Online Mutual fund: One can invest easily through the facility of online mutual fund. It is convenient way to invest in different funds with the same cheque which is otherwise not available in offline mode. The commission structure is as follows:  Upfront(on )

:

50%

 Trail( loyalty Income)

:

50%

 Brokerage

:

50 paisa per transaction; of this 75% will be

taken by franchisee and rest by company.

•

Online IPO Facility: Franchisees provide their clients with facility of online IPO and the commission structure is made on the same which is earned by the franchisee. The commission is provided in two ways:  Per application money  On the basis of allotment

•

Loan against Securities: The shares can be pledged by clients against whom they can obtain loan and can use it for any purpose besides purchasing additional shares. The franchisee gets 0.5% of the loan taken.

•

Loan against Mutual Funds: Besides the above, clients can also take loan against mutual funds held in their demat .

•

Marginal Funding: This is somewhat similar to loan against securities, the only difference being that the loan taken can only be used for purchasing additional units of shares Interest charged for the same- 16%-18%

•

Life Insurance/General Insurance: Karvy has tie-up with almost all LI/GI companies and franchisees can sell those insurance products.

•

TIN/PAN FC: This is an optional facility which franchisee can avail. Thereafter franchisee is authorised to accept applications for PAN number and TIN number which he can directly send to main office of Company after punching those applications. Besides he can collect TDS amount and send it to Hyderabad Office. Share of Franchisee in TIN FC: Pan Card-Rs 5 per application E-TDS: Upto Rs 100- Rs 7.5 Rs 101-1000-Rs 45 Above Rs 1000- Rs 165

Besides franchisee their is another way to partner with Karvy and that is by becoming its remissers. So, now we will discuss another way to associate with company.

REMISSERS: Who is remisser ? Remissers are the individuals, not on the payroll of organization, but stationed organisation’s premises to trade for their own clients.

Who can be a Remisser?  Don’t want to invest in infrastructure  Don’t want to invest in startup capital  Want to invest spare time in Business  Have good existing relations

Associating with Karvy as a Remisser: KARVY has started appointing Remissers at its own branches. Remissers would be individuals, not on the payroll of organization, but stationed at KARVY’s premises to trade for their own clients. The idea here is to leverage on the client base of the remisser and sharing revenue generated with him. The remisser’s benefit is that he doesn’t have to incur any additional infrastructure setup or maintenance cost.

Eligibility Criteria to enter into a Relationship as a Business Associate (Remisser):

1. An individual/ company/ partnership firm with good track record & reputation in financial services/other business/social circles with a good client base.

2. Sub-broker registration in SEBI/Exchanges through KSBL is compulsory without which the remittance of accrued brokerage to remisser will be kept on hold till registration is complete.

3. The sub-broker/ employees of corporate/firm should hold valid NCFM certificates for Cash, F&O and Commodity segments and ensure that NCFM certificate holder in person has to sit on trading terminals in whose name the terminal ID has been generated.

Business Partner Package Offered by KARVY 1. Product : Broking through BSE (Cash & F&O), NSE (Cash & F&O), DP services through NSDL, CDSL.

2. Sales : A Relationship Manager will be assigned to you for regular Research advice & Market Updates through Chat/Phone/Emails/Personal meetings.

3. Business Development: Product research, marketing & business development on a regular basis to encourage knowledge based selling.

4. Back Office : Centralized Web based back office through a dedicated Customer Service Executive assigned to you for routine queries through Chat-Phone- Emails. All stationary items bills, letter heads will be provided by KSBL and digital contract notes will be delivered to the remisser id as per charges applicable.

Commercial & Conditions

Remissers:

1. Refundable Deposits: Total INR 50,000/a. INR 50,000/- with KSBL (Equities)

2. Registration Charges: Rs 27500

3. Revenue Sharing: BROKERAGE SHARING RATIO (EQUITY) KSBL: 60% BUSINESS PARTNER: 40%

4. Minimum Brokerage to be charged to end clients:

Segment Type Brokerage Rate Applicable

Cash Segment (BSE & NSE) Trading 0.03% On Turnover Derivative Segment ( F&O & Commodities) Trading 0.03% On Turnover Cash Segment (BSE & NSE) Delivery 0.30%

Services provided to Remissers:

•

Online Mutual fund: One can invest easily through the facility of online mutual fund. It is convenient way to invest in different funds with the same cheque which is otherwise not available in offline mode. The commission structure is as follows:  Upfront(on )

:

50%

 Trail( loyalty Income)

:

50%

 Brokerage

:

50 paisa per transaction; of this 75% will be

taken by remisser and rest by company. •

Online IPO Facility: Remissers provide their clients with facility of online IPO and the commission structure is made on the same which is earned by the remissers. The commission is provided in two ways:  Per application money  On the basis of allotment

•

Loan against Securities: The shares can be pledged by clients against whom they can obtain loan and can use it for any purpose besides purchasing additional shares. The remissers gets 0.5% of the loan taken.

•

Loan against Mutual Funds: Besides the above, clients can also take loan against mutual funds held in their demat .

•

Marginal Funding: This is somewhat similar to loan against securities, the only difference being that the loan taken can only be used for purchasing additional units of shares Interest charged for the same- 16%-18%

•

Life Insurance/General Insurance: Karvy has tie-up with almost all LI/GI companies and remissers can sell those insurance products.

Other & Conditions for Business Associates:

1. Taxes: Securities Transaction Tax and other exchange charges & taxes as applicable will be leived. 2. Payment : a. Payment delayed by 3 days will be charged @ 18% for both cash & F&O segment. However any further delay, the amount will be debited to SUBBROKER b. The Brokerage accrued will be returned to the SUBBROKER on a monthly basis subject to receipt of audit report. c. There will be no sharing of brokerage in proprietor/partner/directors trading with Karvy. 3. Exclusivity: As a Business Associate of KSBL you are required to sell all the products promoted by the company which includes IPO, MF, PMS, etc. exclusively for KSBL. 4. Change in sub brokerage: The above rates of sub-brokerage payable to the sub broker re subject to modification from time to time to be mutually agreed between KSBL and the Remissers. 5. Certifications:

Sub broker and his/her employees have to clear NCFM examination Cash & Derivatives

TIN/PAN – FC

Eligibility Criteria to enter into a Relationship as TIN/PAN Facilitation Centre with Karvy Data Management Services Limited.

1. An individual/ company/ partnership firm with good track record & reputation in financial services/other business/social circles. 2. Capacity to invest in setting up & maintaining the infrastructure & manpower required for carrying on the business as specified below at their own expense. a. Own or leased premises with requisite power supply and facilities including LAN duly approved by KDMSL in writing. b. Interior work, furniture and Name Board conforming to the design, colours and standards approved by KDMSL c. Connectivity and communication facilities including leased line, ISDN line, telephone line etc duly approved by KDMSL d. Legally licensed operating system, database and other software required for the operations at second party’s premises. f. Any other equipment or installations necessary for carrying on the business without interruption.

given by Karvy Fortune to setup TIN/PAN Facilitation Centre

1. Product 2. Back Office 3. Setup : Initial Glow sign flex material & Initial Visiting Cards will be provided by KDMSL as per charges applicable.

2. Charges Details:-

A) Security Deposit: Rs 100000 B) One time registration cost INR 2,000/- (Indian Rupees Two thousand only) C) Monthly Recurring Charges for Back office and Bandwidth: - Rs. 500/- P.M. D) For additional ID (Optional) Rs.500/- per Id /per month

Revenue of Franchisees through TIN FC TIN FC is an optional service provided to franchisees at a minimal cost and is a good source to generate constant income.TIN/PAN FC provides the franchisee to make PAN cards, give TIN

number and the facility to collect TDS amount and punch it at their own premises(e-TDS) and send it to NSDL later. The franchisee revenue structure is as follows: Pan Card-Rs 5 per application E-TDS: Upto Rs 100- Rs 7.5 Rs 101-1000-Rs 45 Above Rs 1000- Rs 165

Other Major Players in the Market

1) Bonanza Portfolio

Established in the year 1994, Bonanza developed into one of the largest financial services and broking house in India within a short span of time. Today, Bonanza is the fastest growing financial service with 5 mega group companies under it. Bonanza has spread its trustworthy tentacles all over the country with pan-India presence across more than 1400 outlets spread across 460 cities.

Benefits of associating with Bonanza: It is the most trusted retail centric broking house ranked among the top 5 broking houses in the country. It is awarded by BSE as ‘Major Volume Driver’ in ’04 – ‘05 , ’06 – ’07 , ’07 – ’08 and nominated among the Top 3 for the "Best Financial Advisor Awards '08" in the category of National Distributors - Retail instituted by CNBC-TV18. It cover services such as Equity and Derivatives, Commodities, currency derivatives, insurance, IPO and depository services.

2)

Kotak Securities

Kotak Securities is 100% subsidiary of Kotak Mahindra Bank and one of the oldest and largest stock broking firms in the Industry. It is present in 400 cities with 1113 offices all over the country. It has developed its own proprietary trading platform which is robust and among the best in the industry. It has more than 150 technology professionals constantly working on upgrading and speeding up all its systems.

Benefits of associating with Kotak securities: Brand, Leadership Edge, Strong financial background, Investment solutions and Marketing.

3)

Anand Rathi

Anand Rathi is a leading full service investment bank founded in 1994 offering a wide range of financial services and wealth management solutions to institutions, corporations, high–net worth individuals and families. The firm has rapidly expanded its footprint to over 350 locations across India with international presence in Hong Kong & New York. Founded by Mr. Anand Rathi and Mr. Pradeep Gupta, the group today employs over 2,500 professionals throughout India and its international offices.

Benefits of associating with Anand Rathi: It is a reputed brand with years of experience & trust and has ready business model withZero infrastructure cost module. It has attractive Revenue sharing..It provides with excellent Marketing & Sales

4)

India Infoline:

The India Infoline group, comprising the holding company, India Infoline limited and its whollyowned subsidiaries, straddle the entire financial services space with offerings ranging from equity research, equities and derivatives trading, commodities trading, portfolio management services, mutual funds, life insurance, fixed deposits, and other small savings instruments to loan products and investment banking. It was founded in 1995 and the company has a network of over 2100 business locations (branches and sub-brokers) spread across more than 450 cities and towns

5)

Angel Broking

Angel Broking's tryst with excellence in customer relations began in 1987. Today, Angel has emerged as one of the most respected Stock-Broking and Wealth Management Companies in India. With its unique retail-focused stock trading business model, Angel is committed to providing ‘Real Value for Money’ to all its clients.

Benefits of associating with Angel Broking:

It has a specially designed training program to develop the necessary business knowledge. It provides with dedicated Relationship Manager for Equity as well as Wealth Management

Products to guide the business and its development in the long run. It also gives branding in of regular Research & Advisory workshops.

6) Nirmal Bang

Incorporated by Mr.Nirmal Bang, it started its equity broking business operations in 1987 as a sub broker. Currently group is engaged with various capital market operations like equity broking, commodity broking, arbitrage trading, investment activities, margin funding and distribution of financial products. All the group companies are held 100%, directly or indirectly by the promoters.Today it serves over 1 lakh customers spread across 360 cities. It has 180 sub brokers in Rajasthan and over 1500 sub brokers all over India.

7) Sharekhan

Sharekhan, the retail broking arm of SSKI group and one of the largest stock broking houses in the country has won the prestigious awaaz consumer vote awards 2005 for the most preferred stock broking brand in India, in the investment advisors category Sharekhan Bag round network includes over 250 centres across 123 cities in India and having around 120000 customers and equal number of demat customers. The reason behind the preferences for brands were unveiled by examines the following: •

Tangible features of product /service

•

Softer, intangible features like imagery, equity driving preference

•

Tactical measures such as promotional /pricing schemes

8) Reliance Money

Reliance Securities Limited is a Reliance Capital company and part of the Reliance Anil Dhirubhai Ambani Group. Reliance Securities is a permitted of the brand "Reliance Money" for promoting its various products and services.Reliance Money through its pan India presence with 6,233 outlets, has more than 3.5 million customers.

Benefits of associating with Reliance Money: As a sub-broker or franchisee one benefits from the goodwill, recognition, business name and reputation.You get access to number of new products as well as change charge structure, which will help you to retain clients and thereby providing an opportunity to make more money. After association with Reliance Money as a sub broker or a franchisee we provide timely co branding and marketing collaterals on basis of performance.

9) Religare

Religare Enterprises Limited (REL), is one of the leading integrated financial services groups of India.REL’s businesses are broadly clubbed across three key verticals, the Retail, Institutional and Wealth spectrums, catering to a diverse and wide base of clients. REL offers a multitude of investment options and a diverse bouquet of financial services and has a pan India reach in more than 1550 locations across more than 460 cities and towns.

10)

Unicon Investments

UNICON is a financial services company which has emerged as a one-stop investment solutions provider. It was founded in 2004 by two visionary and hard working entrepreneurs, Mr. Gajendra Nagpal and Mr. Ram M. Gupta, who possess expertise in the field of Finance. The company is headquartered in New Delhi, and has its corporate office in Mumbai with regional offices in Kolkata, Chennai, Hyderabad and Noida. UNICON is a professionally managed company led by a team with outstanding managerial acumen and cumulative experience of more than 400 man years in the financial markets The Company is ed by more than 4500 Uniconians and has a team of over 900 business offices in 235 cities across India.

Research Methodology

Research is a common language refers to a search of knowledge. Research is scientific & systematic search for pertinent information on a specific topic, in fact research is an art of scientific investigation. Research Methodology is a scientific way to solve research problem. It may be understood as a science of studying how research is don’t scientifically. In it we study various steps that are generally adopted by researchers in studying their research problem. It is necessary for researchers to know not only know research method techniques but also technology. The scope of Research Methodology is wider than that of research methods. The research problem consists of series of closely related activities. At times, the first step determines the native of the last step to be undertaken. Why a research has been defined, what data has been collected and what a particular methods have been adopted and a host of similar other questions are usually answered when we talk of research methodology concerning a

research problem or study.

RESEARCH DESIGN A research design is defined, as the specification of methods and procedures for acquiring the Information needed. It is a plant or organizing framework for doing the study and collecting the data. Deg a research plan requires decisions all the data sources, research approaches, Research instruments, sampling plan and methods.

Title of the Study: A comparative study between services provided to Karvy Franchisees and other Franchisees.

Duration of the Project: The duration of the project was 45 days from 17th June 2010 to 1st August.2010

Objective of the Study: •

To learn the basis on which the franchisee is given

•

To learn how company saves its fixed costs by offering franchisees.

•

To explore franchisees of different companies in the City.

•

To know franchisee plans of different companies.

•

To learn about various financial products

•

To interact with number of franchisees and know what problems they face in services provided to them.

•

To know the strengths of other company’s franchisee plans

•

To suggest possible suggestions to Karvy

Type of Research: This research is descriptive and qualitative type of research which was used to collect useful data .

Sample Size and Method of Selecting Sample: The sample size used for collecting data is 100.The samples have been collected purely on judgemental basis .The name of the franchisees were collected from the website of National Stock Exchange(NSE) and thereafter questionnaires were used to collect data. Statistical tools are carefully used wherever required .Efforts has been put to properly analyse the data and come to proper conclusion.

Scope of Study: The study was carried in entire Jaipur City. It includes franchisees of almost all reputed companies. This report can be used further in similar research work as secondary data.

Limitation of Study:

While carrying research work, lot of problems were faced by us:

•

It was difficult to obtain correct data and thus we had to visit both companies and their franchisees separately to the data.

•

We were faced with lack of cooperation by companies and they wanted to keep their data confidential.

•

In few cases, the company had differentiating plan for their franchisees. The franchisee plan was different according to franchisees.

Facts and Findings:

This study is a comparative one to find out the difference between the services provided by Karvy to its franchisees and by other companies to its franchisees. The basis on which the data was collected was the basic one on the basis of which a person is interested to take the franchisee of a company. A person taking franchisee always looks to the amount he needs to invest, and whether facility provided to him is worth his investment. The basis of difference on which comparison is made are as follows:  Number of Franchisees

 Security Deposit  Registration Charges

 Back Office Cost  Brokerage  Sharing  Client Database  Cheque Punching Facility  Online IPO and Mutual Fund facility  Loan against shares and mutual funds  Trading limit  Level  Marginal funding  Others

The findings after market comparison has been put into the tabular form as given below :

Basis Of Difference No. Of Franchisees

KARVY

SHAREKHAN

KOTAK SECURITIES

10 in Rajasthan Over 1000 in India

10 in Jaipur

Security Deposit

Rs 150000 (Equity)+ Rs 100000 (Commodity)

Registration Charges Back Office Cost Brokerage Sharing

Rs 27500

Rs 28000

Rs27500

Rs 2000 per month 3P:30P 60:40

No Cost

Rs 1000

3P:30P 50:50

2P:20P 50:50

Rs 300000

Client Database

Yes

No

No

Cheque Punching Facility Online IPO and Mutual Funds Facility

Yes

No

No

Yes

Only Online IPO

Yes

Loan against Securities and Mutual Funds

Yes

Only loan against Securities

Only Loan against securities

Trading limit

Intraday-8-10 times Delivery-3-4 times

Intraday-5 times Delivery-3 times

Depends on customer profile

Level

Head Office

Branch Office

Branch Office

Marginal Funding Demat opening Charges

Yes

No

Yes

Rs 650 AMC-Rs 440

Free opening

Free Opening

Others

2Km Facility TIN/PAN FC

Continued..... Basis Of Difference No. Of Franchisees

ANAND RATHI

BONANZA PORTFOLIO

INDIA INFOLINE

Security Deposit

Rs 100000 per segment

Rs 50000 Per segment

Rs 200000

Registration Charges

Rs 30000

Rs 25000

Rs28300

Back Office Cost

Rs 2500 per month

No Cost

No Cost

135 in Rajasthan

Brokerage

2P:20P

Rs 1000 per Crore

2P:20P

Sharing

50:50-sharing 1P:10P-Fixed No

According to client profile No

50:50

Cheque Punching Facility Online IPO and Mutual Funds Facility Loan against Securities and Mutual Funds Trading limit

Yes

No

No

Online IPO

Yes

Yes

Loan against securities

Only loan against Securities

Only Loan against securities

Intraday-3 times Delivery-1 time

Depends on Clients profile

Level

Both Head Office and Branch Office

Intraday2- 3times Delivery2 times Branch Office

Marginal Funding

Yes

No

No

Demat opening Charges

Free

Free opening

Free Opening

Others

USP: Brand Name

Technical Calls, SMS alert

InitialLevel , Free Software

ANGEL BROKING 9000 sub brokers all over India

UNICON INVESTMENTS

Client Database

No

Both Head Office and Branch Office

Continued.... Basis Of Difference No. Of Franchisees

NIRMAL BANG

Security Deposit

Rs 200000

Rs 100000

Rs 100000

Registration Charges

Rs 28000

Rs27000

Rs 27500

180 in Rajasthan Around 1500 all over India

Back Office Cost Brokerage

Rs 850 per month

No Cost

2P:20P

1P:10P

Sharing

60:40

75:25

Rs 3500 per month Depends on clients profile Fixed 1P:10P

Client Database

No

No

No

Cheque Punching Facility

No

No

No

Online IPO and Mutual Funds Facility

Yes

Only online IPO

No

Loan against Securities and Mutual Funds

Only Loan against securities

Only Loan against securities

Only Loan against securities

Trading limit

Intraday-10 times Delivery-3 times

Intraday-5 times Delivery-3 times

Level

Both Head Office and Branch Office

Branch Office

Intraday10 times Delivery3-4 times Branch Office

Marginal Funding Demat opening Charges

Yes

No

No

Free opening AMC-Rs 225

Rs 550

Others

Free insurance with margin cheque of Rs 500000

Materials provided for Promotion and marketing

Analysis and Interpretation:

Number of Franchisees of different Broking House used as samples for data collection

The study was conducted randomly on almost all the franchisees of reputed companies. Out of 100 franchisees that were selected as samples consisted of Name of Companies

Figures (in %)

Bonanza

15

Anand Rathi

15

Kotak Securities

8

India Infoline

15

Sharekhan

12

Nirmal Bang

5

Angel Broking

15

Reliance Money

10

Religare

5

1) How long have you been associated with the current company? a) 0-1 years

b)1-2 years

c) 2-3years

d) More than 3 years

It was found in the study that 23% were doing business for less than 1 year. Out of these 68% were those who had switched from some another company due to some problems or had taken new franchisee of different company besides the existing one. Only 16% of the franchisees were running for more than 3 years. 25% carried their business for more than 2 years. Besides this, we noticed that the owner had different franchisees for equities and commodities as per the services suitable to them.

2) Have you heard of Karvy? a) Yes

b) No

In the study, 92%of the franchisees knew well about Karvy. But their their were around 8% of franchisee who did not knew about Karvy. Among these, 45% were those who knew Karvy as Registrar and transfer agent but were not aware about their equity business. This was probably due to reason that Karvy doesn’t go for marketing itself and so few of them were unaware.20% were not even aware of its name.This was due to the reason of less knowledge on part of franchisees about the market competitors.

3) Would you like to know more about Karvy, especially, Karvy Fortune? a) Yes

b)No

Maximum franchisees showed interest in learning about Karvy Fortune and its plan offered to the franchisees. This data was around 95% who keenly wanted to know about its plan and even raised many queries related to it. But 5% of total did not even want to know more about it. This was probably due to reason that they did not had enough time to hear about it, were satisfied with the current organisation or had already interacted with the company and knew its plan completely. But this formed a minimal part of survey.

4) Do you think that their should be appropriate distance between two franchisees of the same company? a) Yes

b) Doesn’t matter

b) No

Around 55% of the franchisees agreed to the fact that their should be appropriate distance between two franchisees of the same company as it reduces competition, whereas 17% disagreed to the fact. According to 28% of franchisees, this facility didn’t matter to them as they will always have competition with other companies, if not Karvy. Those with majority agreed to the fact that their should be appropriate distance between franchisees of same organisation because of the fact that we saw many organisations who had their franchisee in the same location and they had to face problems. Few, who had disagreed to the fact, were right to some point that competition is huge in market and there would definitely be competition with some other organisation and so this facility would prove to be of no use.

5) Do you work on fixed basis or sharing basis? a) Fixed

b) Sharing

Their were 35% of the franchisees who worked on fixed basis of 1P:10P.They did not like to work on sharing basis. They came with a point that by this way they could generate more revenue. Rest 65%worked on sharing basis. Out of those who worked on sharing basis, 43% worked on 75:25.This was the most profitable sharing offered to franchisees by some companies when they generated good volume of business.34% worked on sharing of 60:40 and the rest were working on 50:50. It was noticed in the study that no matter how high their sharing was, they were not satisfied with it, and they wanted more than what they were getting.

6) If, on sharing basis than what is your sharing ratio? a) 50:50

b) 75:25

b) 60:40

Out of those who worked on sharing basis, 43% worked on 75:25.This was the most profitable sharing offered to franchisees by some companies when they generated good volume of business.34% worked on sharing of 60:40 and the rest were working on 50:50.The most unsatisfied were those who were working on 50:50 or 60:40.They complained that this was reducing their income and hampering their growth. It was also noticed in the study that no matter how high their sharing was, they were not satisfied with it, and they wanted more than what they were getting.

7) What brokerage do you charge from the clients? a) 1P:10P

b) 2P:20P

c) 3P:30P

d) Other

In the study, it was seen that maximum competition was in the brokerage rates only. Now the clients work with those companies who charges less brokerage.60% of the franchisees were charging brokerage as low as 1P:10P.Also 20% were charging brokerage of 2P:20P.Only 12% of them were taking brokerage of 3P:30P. Rest 8% were those who were working on fixed brokerage as Rs 800 per crores.

8) Where do you get level from? a) Head Office

b) Both

b)Branch Office

It was found that 18% of the level to the franchisees was given by Head Office whereas 44% were served by Branch Office. Rest 38% were served by both head office and branch office. Those who were served by both of them complained that the problems were not solved immediately.30% of franchisees claimed that their problems were not solved immediately and it took little time as their was a chain from Branch office to head office.

9) Are they able to solve your problems on immediate basis? a) Yes

b) No

70% of the franchisees claimed that their problems were immediately solved or took a minimal time if the problem is big. Rest 30% denied to the fact that the problem was solved at immediate basis. They complained that their was no specific person who could listen to their problems. They had to sometime call the local branch office initially and if they could not solve their problem, only then they will be entertained at head office.

10)Do you feel the requirement of cheque punching facility? a) Yes

b) No

In case of provision of cheque punching facility,68% liked this facility as it made their work easy and saved time which would otherwise be wasted to send those cheques to branch office at first. This also enabled them to open trade limit of their clients in mere 10 minutes. Also this facility is not provided by every company. Rest 32% didn’t feel the requirement of the same.

11)What is your Back-Office cost? a) No Cost

b) Less than Rs 1000

c) Rs 1000-2000

d) More than Rs 2000

In the study, it was found, that 64% of the franchisees didn’t incur any back-office cost.15% of franchisees incurred cost less than Rs 1000.Only 21% of franchisee were paying back office cost of more than Rs 1000 out of which 6% were paying more than Rs 2000.

12)Do you think it is reliable?

a) Yes

b) No

Those who were paying these costs found it to be unreliable.72% people said that these costs were unreliable.28% still found it reliable if some add-on facility is given to them.

13)Do you think client database would help you to grow business? a) Yes

b) No

b) Doesn’t matter

In the study, it was found that only 40% of the franchisees agreed to the fact that client database can help them grow business.25% completely disagreed to this thing. According to the rest 35% of the franchisees, client database would only help those people who are new to business and do not have good client base. Those who are well established in this business do not require client database.

14)Would you like to avail TIN/PAN FC?

a) Yes

b) No

63% of the franchisees showed interest in having TIN/PAN FC. Rest 37% felt that TIN/PAN FC would be an additional investment, would require more manpower and generates less income as compared to investment. They even felt that the security deposit of Rs 100000 was very high as compared to income derived from it.

15)Do you think TIN/PAN FC will help you in getting more clients? a) Yes

b)No

Despite of not interested to have TIN/PAN FC, they agreed to the fact that it can help in getting more clients to trade with them. Those clients who come for getting their Pan Card can easily be tapped to open their Demat . E-TDS facility along with it is a good option for them.

16)After knowing services provided by Karvy, would you like to be associated with it?

a) Yes

b) No

b) Will tell later

It was noticed while carrying out the study that few franchisees were interested in the plan given by Karvy because of its Brand name and good facility. They were ready to open a franchisee of Karvy at different location other than they were working presently but their were few things which stopped them such as high security deposit, high back office cost, high brokerage and less sharing.65% of franchisees refused as they found the plan costly.18% showed interest in associating with Karvy. Rest 17% said that they would the company later.While carrying this research work, their was one suggestion which was given to us by the franchisees which needed to be amended in the plan seriously to make it a good plan enough to attract franchisees. This one thing was to reduce the cost and increase the sharing. This is highly required in the competitive market otherwise it would be difficult for Karvy to sustain in the market.

Swot Analysis

Every company has certain strengths and weaknesses, no company can be perfect, if it is giving good services then it has to be little costly otherwise it would run into loss. Similarly there is opportunity and threats for every organisation. During our study covering whole aspect of market and competitors, we did SWOT analysis for the company with respect to various factors in market.

STRENGTH • • • •

Brand Name All financial needs under one roof. Full fledge research units comprising of both fundamental and technical research. Quality service provided to clients.

Weakness • •

Low ments High Cost structure

Opportunity • • •

Potential Market for investors Tapping those people who are not satisfied with their existing business. More aware people intending to invest in markets with right companies

Threat • •

Growing competition in this sector Decreasing Brokerage Rates

CONCLUSION:

After conducting the research work, and analyzing it carefully, it was seen that there are many other broking firms besides Karvy which are giving good competition to the company. It was also noticed that franchisees intend to switch easily provided they are offered with a profitable plan. No franchisee was completely satisfied by its company and wanted certain additional facilities. We came to certain conclusion after the study which is as follows: 1) There is tough competition in the market and hence the company needs to make flexible plan rather than a fixed policy to sustain in the market and retain the existing clients. 2) It is easy to takeover franchisees who are not satisfied with their existing companies by giving them a better option. 3) The brokerage rates charged by Karvy are high and it should be reduced if it wants more clients to deal with it. 4) It was also noticed that few people still know Karvy as registrar and transfer agent and not aware of its Equity business. The company needs to create awareness in the market for the same. 5) The plan of Karvy is good provided the cost is reduced according to what is prevailing in the market. Few services like cheque punching facility, loan against Mutual funds, Marginal funding is not provided by everyone in the market. 6) The provision of client database is a good option for those franchisees only who are new to the business, rest all did not found this facility useful as they already had good network, though it can be used to grow the business. 7) TIN/PAN FC is a good option and an additional business to earn income. Not all companies can offer the same as authority lies with 4 companies only i.e. UTI, Shell, Alankrit and Karvy. This can be add-on facility can be used to attract franchisees toward Karvy provided Equity Franchisee + TIN/PAN FC is offered at a reasonable security deposit. 8) In the research work, it was found that company had different franchisee plans depending on the business generated by their franchisees. Those who generated high volume were given good facilities than the rest. Karvy’s policy is same for all type of franchisees.

Recommendation and Suggestions:

The company had a very good plan and intended to serve its franchisee in the best possible manner but it had few shortcomings due to which the brokers didn’t showed interest in having the Karvy franchisee despite of liking it. Also due to these few shortcomings Karvy failed to achieve its target of activating new Franchisee in the Jaipur region. If these pitfalls are removed,then the plan would work better and attract more franchisees as Karvy is a big brand. 1) The Brokerage charges, 3 paisa and 30 paisa for intraday and delivery respectively, are quiet high. In the competitive market where brokerage is as less than 1P:10P,it is difficult to attract investors to trade at 3P:30P.It should be reduced.

2) The security deposit of Rs 150000(Equity) and Rs100000 (commodity) was high as compared to other plans in the market. It should be reduced to at least Rs 100000 for both Equity and Commodity.

3) The percentage of sharing of brokerage which currently is: Sub broker ship: 60:40(sub-broker: karvy) Remissers

: 40:60(remissers: karvy)

It should also be changed. During the market study, it was felt that the sharing of franchisees was very low and lot of sub-brokers questioned on it and so it is suggested to increase their sharing and make it to 70:30 for franchisees and 50:50 for remissers. 4) The back-office cost of Rs 2000 per month is not reliable and it should be completely finished off.

APPENDIX

Questionnaire

Sub Broker Address

No

Email

1) Which company are you currently associated with? __________________________________________________ 2) How long have you been associated with the current company?

3)

b) 0-1 years

b)1-2 years

c) 2-3years

d) More than 3 years

Have you heard of Karvy? b) Yes

4)

Would you like to know more about Karvy, especially, Karvy Fortune? b) Yes

5)

b) No

b)No

Do you think that their should be appropriate distance between two franchisees of the

same company? c) Yes

b) No

d) Doesn’t matter

6)

Do you work on fixed basis or sharing basis? b) Fixed

7)

b) Sharing

If, on sharing basis than what is your sharing ratio?

c) 50:50

b) 60:40

d) 75:25 8)

9)

What brokerage do you charge from the clients? b) 1P:10P

b) 2P:20P

c) 3P:30P

d) Other

Where do you get level from? c) Head Office

b)Branch Office

d) Both 10)

Are they able to solve your problems on immediate basis? b) Yes

11)

b) No

Do you feel the requirement of cheque punching facility? b) Yes

12)

13)

What is your Back-Office cost? b) No Cost

b) Less than Rs 1000

c) Rs 1000-2000

d) More than Rs 2000

Do you think it is reliable? b) Yes

14)

b) No

b) No

Do you think client database would help you to grow business? c) Yes

b) No

d) Doesn’t matter

15)

Would you like to avail TIN/PAN FC? b) Yes

16)

b) No

Do you think TIN/PAN FC will help you in getting more clients?

b) Yes

17)

b)No

After knowing services provided by Karvy, would you like to be associated with it? c) Yes

b) No

c) Will tell later

Recommendations: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ___________________________________

BIBLIOGRAPHY

Websites:

                      

www.karvy.com www.indiacorporateadvisor.com www.themanagementor.com www.nsdl.co.in www.wikipedia.com www.sharekhan.com www.bonanzaonline.com www.kotaksecurities.com www.rathionline.com www.indiainfoline.com www.angelbroking.com www.nirmalbang.com www.reliancemoney.com www.religare.in www.uniconindia.in www.nseindia.com www.amfiindia.com www.researchandmarkets.com www.indiamba.com www.ibef.org www.entrepreneur.com www.franchisemoneymaker.com www.franchize.info

Books and magazines:

    

The franchising World Karvy- The Finapolis Karvy-Bazaar Baatein Times of India Economic times