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A REPORT ON

VALUATION OF SHARES OF RELIANCE COMMUNICATION BY USING CAPITAL ASSET PRICING MOD


EL.

By
Swati Ravindra Abhyankar
Enrollment No: 6ND20151
COURSE: PGDBA-MBA (2006-08)
INC-AKOLA

A report submitted in partial fulfillment of the requirements of


PG PROGRAM (Class of 2007)
ICFAI National College

(Certificate from Faculty Supervisor)


CERTIFICATE
This is to certify that the Management Thesis-I titled â Valuation of Shares of Relia
nce Communication by using Capital Asset Pricing Model.â
Submitted by Swati Ravindra Abhyankar
Enrollment No: 6ND20151
During Semester-III of the PG Program (Class of 2008) embodies original work don
e by him/her.
Signature of the Faculty Supervisor
Name (in Capitals) :____________________
Designation :_____________________
Center :_____________________

PREFACE
A study of Valuation of Shares of Reliance Communication by using Capital Asset
Pricing Model is important study related to Share market of Reliance Communicati
on. The reason behind this study is that what is the quarterly Share market of R
eliance and how it will be calculated.
The objective of any investor is to maximize ex
pected returns from his investment, subject to various constraints, primarily ri
sk. Return is the motivating force, inspiring the investor in the form rewards,
for undertaking the investment.
Risk can be defined as the chance that the act
ual outcome from an investment will differ from the expected outcome.
By using Capital Asset Pricing Model we can calculate the Rate of Return i.e. th
e value of shares. First calculation of Beta and after the calculation of Expect
ed Rate of Return.
DECLARATION
I here by declare that the project work on â Valuation Of Shares of Reliance Communic
ation by using Capital Asset Pricing Modelâ is submitted to ICFAI National college a
t Hyderabad is a record of an original work done by me under the guidance of Mr.
B. Deshmukh company guide of Reliance Communication Ltd and Mr.S.Biradar, facu
lty guide during the internship programme of ICFAI national college and this pro
ject work has not performed the basis of the award of any other degree of diplom
a/associate ship/fellowship and similar project if any information regarding the
company of customers collected daily the project work.
Any information that I obtained from time to time regarding the Thesis is treate
d as being of the utmost confidential character and I shall exercise discretion
and not divulge any such information.

YEAR-2006-2008
MBA PROGRAM

SWATI R. ABHYANKAR
ACKNOWLEDGEMENT
It was altogether a different and wonderful experience to be in Reliance Communi
cation as a summer trainee.
I would like to thanks Mr Bhushan Deshmukh company guide of Reliance Communicati
on and my faculty guide Mr.Shivkumar Biradar for providing me such a great chanc
e to work with Reliance Communication.
I would like to thanks my faculty of INC-Akola Mr.Rajkumar Sharma for his help i
n writing this thesis. I also want to thank to my coulee for their ideas; their
help was very crucial in writing this thesis.
I also express my sincere gratitude to my Unit Manager & Project Guide, who has
been so cooperative and helpful from the first day of my training till the end.
He also helped me a lot in enhancing my knowledge about the technicalities of co
mmunication sector. I am highly thankful to him for providing me the constant su
pport and encouragement throughout the project.
Lastly I would like to thank all those who have helped me during the four months
of learning to make it knowledgeable learning.

Swati R.Abhyankar
TABLE OF CONTENTS
Acknowledgements
List of Illustrations
Abbreviations
Summary
Chapter I -Introduction
1.1 Objectives and Limitations
1.2 Methodology
1.3 Findings and suggestions
Chapter II- Industry Profile
2.1 Telecom Industry profile
2.2 Growth in Telecom Industry
Chapter III- Company Profile
3.1 Competitors and market share
3.2 Business Profile
3.3 Organization Structure
Chapter IV- Research Design
4.1 Capital Asset Pricing Model
4.3 Elements of CAPM model
4.4 Theory of Risk and Return
4.5 Limitation of Research
Chapter V-Review of the Literature
Chapter VI-Data Collection
6.1 Quarterly market share of Reliance
6.2 Balance sheet of Reliance
Chapter VII-Data Analysis
7.1 Calculation Of Risk Free Rate
7.2 Calculation of Beta
7.3 Calculation of Rate Of Return
Chapter VIII-Conclusion
Chapter XI- References
List of Illustrations
What is Valuation?
What is Valuation of Shares?
What is Shares?
What is Investment?
What is Risk?
What is Return?
What is Rate of Return?
What is Standard Deviation?
What is expected Rate of Return?
What is Diversifiable risk and Non Diversifiable risk?
What is Measurement of Beta?
What is Variance?
What is Capital Asset Pricing Model?
Summary of the progress till date:
An organization in its lifecycle consolidates from the nascent stage to the grow
th stage for survival, to explore, to expand, to rejuvenate and for everlasting
existence. The company has to implement a business model for proper implementat
ion of its business activities. The core area of the concern for the company is
to generate sales and to generate sales it has to make and implement profit mak
ing strategic business development activities. The performance of a company dep
ends on its sales and its sale depends upon the marketing environment that influ
ences its marketing
Activities. The marketing activities of an organization focus on satisfying cus
tomer needs, which is a very dynamic factor in todayâ s marketing environment. The m
arket is becoming more and more volatile with the presence of many competitors c
atering to the same segment of the market and so to grab the larger market share
and remain competitive in the market the company needs to always rejuvenate its
elf at various fronts such as technology, R&D, service network, marketing, etc.
My SIP Company is Reliance Communication Ltd where I am doing internship for 4 m
onths. My project topic is to study the Valuation of shares of Reliance communic
ation by using Capital Asset Pricing Model. In this project I will learn about t
he business model and business development strategies of the Reliance Communicat
ion. It will give me a brief view of the company, competitors, business, custom
ers, and the life cycle of the sales. The methodology I am using for the projec
t is the questionnaires, which I have designed for my companyâ s business development
officer and the prospective customers. Through the help of these questionnaire
s I am going to study the Valuation of shares of the company.