PREFACE

This project report is on the MARKETING STRATEGY OF MUTHOOT FINANCE . Theories can be read but the perform it in the real life is different experience will together. Management courses are designed to produce future managers and unless you have practical knowledge the theoretical knowledge is not implicated. Hence this project is to give us the practical way of knowing how market behaves and reacts. This is also in part fulfillment of BBA Degree.

RAKHA JATAV BBA

IV th Semester

ACKNOWLEDGEMENT
Preparing a project of this nature is an arduous task and I was fortunate enough to get support from a large number of persons I wish to express my deep sense of gratitude to all those who generously helped in successful completion of this report by sharing their invaluable time and knowledge. It is my proud and privilege to express my deep regards to respected Principal Sir Dr. J.P.N. Pandey, Head of Department Dr Anand Tiwari, Mrs. Shikha Urmil Khan and Mr. Shailendra Patel Department of Business Management , Govt. Autonomous Girls P.G. College of Excellence, Sagar, for allowing me to undertake this project. I feel extremely exhilarated to have completed this project under the able and inspiring guidance of Mr.Shailendra patel . She rendered me all possible help and guidance while reviewing the manuscript in finalising the report. I also extend my deep regards to my teachers, family members, friends and all those whose encouragement has infused courage in me to complete the work successfully.

RAKHA JATAV B.B.A.

IV th Semester

DECLARATION BY THE CANDIDATE

I declare that the project report titledMARKETING STRATEGY OF MUTHOOT FINANCE. to prepare the marketing strategy and Advertisement is my own work conducted under the supervision of Mr.Shailendra patel, Department of Business Management Govt. Girls P.G. College of Excellent, Sagar. To the best of my knowledge the report does not contain any work which has been submitted for the award of any degree, anywhere.

Name : RAKHA JATAV B.B.A.

IV th Semester

CERTIFICATE
The Project report titled " MARKETING STRATEGY OF MUTHOOT

FINANCE"has been prepared the marketing strategy and advertisement by Miss. RAKHA JATAV student of B.B.A. IV
of MR.SHAILENDRA
th

Semester under the guidance and supervision for the fulfillment of the Degree of B.B.A.

PATEL

Signature of the Supervisor

Signature of the Head of the Department

Signature of the Examiner

INTRODUCTION
We are the largest gold financing company in India in terms of loan portfolio, according to the 2010 update to the IMaCS Research & Analytics Industry Reports, Gold Loans Market in India, 2009 (IMaCS Industry Report, (2010 Update)). We provide personal and business loans secured by gold jewellery, or Gold Loans, primarily to individuals who possess gold jewellery but could not access formal credit within a reasonable time, or to whom credit may not be available at all, to meet unanticipated or other shortterm liquidity requirements. According to the IMaCS Industry Report (2010 update), as of March 31, 2010 our branch network was the largest among gold loan NBFCs in India. Our Gold Loan portfolio as of September 30, 2011 comprised approximately 5.5 million loan accounts in India that we serviced through more than 3,274 branches across 20 states, the national capital territory of Delhi and four union territories in India. As of September 30, 2011, we employed 21,543 persons in our operations. We are a Systemically Important Non-deposit taking NBFC headquartered in the southern Indian state of Kerala. Our operating history has evolved over a period of 72 years since M George Muthoot (the father of our Promoters) founded a gold loan business in 1939 under the heritage of a trading business established by his father, Ninan Mathai Muthoot, in 1887.Since our formation, we have broadened the scale and geographic scope

of our retail lending operations so that, as of March 31, 2010, we were Indias largest provider of Gold Loans. In the years ended March 31, 2008, 2009, 2010, 2011 and in the period ended September 30, 2011, revenues from our Gold Loan business constituted 95.97%, 96.71%, 98.08%, 98.75% and 99.01%, respectively, of our total income. In addition to our Gold Loans business, we provide money transfer services through our branches as sub-agents of various registered money transfer agencies, and recently have commenced providing collection agency services. We also operate three windmills in the state of Tamil Nadu. We issue secured non-convertible debentures called Muthoot Gold Bonds on a private placement basis. Proceeds from our issuance of Muthoot Gold Bonds form a significant source of funds for our Gold Loan business. We also rely on bank loans and subordinated debt instruments as our sources of funds. As per our audited financial statements as of September 30, 2011 we had ` 50,415 million in outstanding Muthoot Gold Bonds and ` 122,152 million in other borrowings. We also raise capital by selling a portion of our loan receivables under bilateral assignment agreements with various banks. We also raise capital by issuing commercial paper and listed & credit rated nonconvertible debentures under private placement mode to various institutional investors. Our customers are typically small businessmen, vendors, traders, farmers and salaried individuals, who for reasons of convenience, accessibility or necessity, avail of our credit facilities by pledging their gold jewellery with us rather than by taking loans from banks and other financial institutions. We provide retail loan products, primarily comprising Gold Loans. We also disburse other loans, including those secured by Muthoot Gold Bonds.Our Gold Loans have a maximum 12 month term. As

per our audited financial statements, our average disbursed Gold Loan amount outstanding was ` 37,765 per loan account as of September 30, 2011. For the period ended September 30, 2011, our retail loan portfolio earned, on average, 1.82% per month, or 21.87% per annum. As per our audited financial statements, as of March 31, 2008, 2009, 2010, 2011 and as of September 30, 2011, our portfolio of outstanding gross Gold Loans under management was ` 21,790.1 million, 33,000.7 million,` 73,417.3 million, ` 157,280.7 million and 207,666.2 million, respectively, and approximately 30.1 tons, 38.9 tons, 65.5 tons, 112.0 tons and 129.5 tons, respectively, of gold jewellery was held by us as security for our Gold Loans. Gross non-performing assets ("NPAs") were at 0.42%, 0.48%, 0.46%, 0.29% and 0.59% of our gross retail loan portfolio under management as of March 31, 2008, 2009, 2010, 2011 and as of September 30, 2011 respectively.As per our audited financial statements, in the years ended March 31, 2008, 2009, 2010 and 2011, our total income was ` 3,686.4 million, ` 6,204.0 million, ` 10,893.8 million, and ` 23,158.7 million, respectively, demonstrating an annual growth rate of 57.56%, 68.29%, 75.59% and 112.59%, respectively. As per our audited financial statements, in the six months ended September 30, 2011, our total income was ` 20,245.4 million.As per our audited financial statements in the years ended March 31, 2008, 2009, 2010 and 2011our profit after tax was ` 630.6 million, ` 978.7 million, ` 2,285.2 million and ` 4,941.8 million, respectively, demonstrating an annual growth rate of 43.80%, 55.20%, 133.49% and 116.25%, respectively. As per our audited financial statements, our profit after tax in the six months ended September 30, 2011 was ` 4,060.06 million.As per our audited financial statements as of March 31, 2008, 2009, 2010, 2011 and September 30, 2011, our

networth was ` 2,131.1 million, ` 3,614.5 million, ` 5,841.9 million, ` 13,341.9 million, and ` 26,120.3 million respectively. We believe that the following competitive strengths position us well for continued growth.Market leading position in the Gold Loan business with a strong presence in under-served rural and semiurban markets,Gold loans are the core products in our asset portfolio. We believe that our experience, through our Promoters, has enabled us to have a leading position in the Gold Loan business in India. Highlights of our market leading position include the following.We are the largest gold financing company in India in terms of loan portfolio, according to the IMaCS Industry Report, (2010 Update). As per our audited financial statements, our loan portfolio as of September 30, 2011 comprised approximately 5.5 million loan accounts, in India with Gold Loans outstanding of ` 207,666.2 million. We have the largest branch network among gold loan NBFCs, according to the IMaCS Industry Report (2010 update). As of September 30, 2011, we operated 3,274 branches across 20 states, the national capital territory of Delhi, and four union territories in India. Our branch network has expanded significantly in recent years from 373 branches as of March 31, 2005 to 3,274 branches as of September 30, 2011, comprising 589 branches in northern India, 2,114 branches in southern India, 422 branches in western India and 149 branches in eastern India covering 20 states, the national capital territory of Delhi and four union territories in India. We believe that due to our early entry we have built a recognizable brand in the rural and semi-urban markets of India, particularly in the southern Indian states of Tamil Nadu, Kerala, Andhra Pradesh and Karnataka. As of September 30, 2011, the southern Indian states of Tamil Nadu, Kerala, Andhra Pradesh, Karnataka, and the

Union Territory of Pondicherry constituted 71% of our total Gold Loan portfolio.We have a strong presence in under-served rural and semi-urban markets. A large portion of the rural population has limited access to credit either because of their inability to meet the eligibility requirements of banks and financial institutions because credit is not available in a timely manner, or at all. We have positioned ourselves to provide loans targeted at this market. We offer products with varying loan amounts, advance rates (per gram of gold) and interest rates. The principal loan amounts we disburse usually range from ` 2,000.0 to ` 200,000.0 while interest rates on our Gold Loans usually range between 12.00% and 26.00% per annum.

HISTORY Muthoot Finance our Company was originally incorporated as a private limited company on March 14, 1997 with the name The Muthoot Finance Private Limited under the Companies Act. Subsequently, by fresh certificate of incorporation dated May 16, 2007, our name was changed to Muthoot Finance Private Limited. The Company was converted into a public limited company on November 18, 2008 with the name Muthoot Finance Limited and received a fresh certificate of incorporation consequent upon change in status on December 02, 2008 from the RoC. Merger with Muthoot Enterprises Private Limited Our Company, along with Muthoot Enterprises Private Limited, filed a composite scheme of arrangement bearing C.P. Nos. 48 and 50 of 2004 under the Companies Act before the High Court of Kerala (Scheme of Amalgamation). The Scheme of Amalgamation was approved by the board of directors of our Company through the board resolution dated April 28, 2004. Pursuant to the approval of the Scheme of Amalgamation by the High Court of Kerala by an order dated January 31, 2005, Muthoot Enterprises Private Limited was merged with our Company, with effect from March 22, 2005 and the High Court of Kerala had instructed all the parties to comply with the statutory and other legal requirements to make the Scheme of Amalgamation effective. The company on March 22, 2005 filed a certified copy of the order of the High Court of Kerala with the RoC.With the

successful implementation of the Scheme of Amalgamation, the undertaking of Muthoot Enterprises Private Limited along with its assets and liabilities was transferred to and vested in our Company. Key events, milestones and achievements Year 2001 RBI license obtained to function as an NBFC. 2004. Obtained highest rating of F1 from Fitch Ratings for short term debt of Rs. 200 million. 2005 Retail loan and debenture portfolio of the Company exceeds Rs. 500 million. Merger of Muthoot Enterprises Private Limited with the Company 2006. F1 rating obtained from Fitch Ratings affirmed with an enhanced short term debt of Rs. 400 million. 2007 Retail loan portfolio of the Company crosses Rs. 10 billion. RBI accords status of Systemically Important ND-NBFC. Branch network of the Company crosses 500 branches. Net owned funds of the Company crosses Rs. 1 billion. 2008 Net owned funds of the Company crosses Rs. 2 billion. Retail loan and debenture portfolio crosses Rs. 20 billion and Rs. 10 billion respectively. F1 rating obtained from Fitch Ratings affirmed with an enhanced short term debt of Rs. 800 million. Overall credit limits from lending banks crosses Rs. 5 billion. Conversion of the Company into a public limited company. Fresh RBI license obtained to function as an NBFC without accepting public deposits, consequent to change in name.. 2009 Retail loan and debenture portfolio crosses Rs. 30 billion and Rs. 15 billion respectively. Net owned funds of the Company crosses Rs. 3 billion. Gross annual income crosses Rs. 5 billion. Overall credit limits from lending banks crosses Rs. 10 billion. 2010. Retail loan and debenture portfolio crosses Rs. 50 billion and Rs. 20 billion respectively. Net owned funds of the Company crosses Rs. 4 billion. Overall credit limits from lending banks

crosses Rs. 20 billion. ICRA assigns A1+ rating for short term debt of Rs. 2 billion. CRISIL assigns P1+ rating for short term debt of Rs. 4 billion. Branch network of the Company crosses 1,000 branches. Demerger of the FM radio business into Muthoot Broadcasting Private Limited. Private equity investment of an aggregate of Rs. 1,575.45 million from Matrix Partners India Investments, LLC and Baring India Private Equity Fund III Limited. Private equity investment of an aggregate of Rs. 425.83 million from Kotak India Private Equity Fund and Kotak Investment Advisors Limited. Financial Year 2010-11 has been a landmark year for your Company for the Gross Retail Loan Assets Under Management crossing the land mark figure of Rs. 1500000 lacs. Gross Retail Loan Assets Under Management stood at Rs. 1586045 lacs as of 31 March, 2011 registenng a growth of 113% as against Rs. 743815 lacs reported during the financial year ended 31 March, 2010. Interest Income registered a growth of 113% to reach at Rs 229834 lacs for the financial year 2010-11 as compared to Rs. 10774$ lacs reported during the previous financial year Profit Before Tax amounted to Rs. 76121 lacs for the financial year 2010- 11 as compared to Rs. 34555 lacs registering a growth of 120% as compared to the previous financial year. 1128 new branches were opened across the country during the year white efforts were put in ensuring deeper penetration into the rural heartlands of the Country. The average gold loan outstanding per branch has increased from Rs. 457.43 lacs to Rs. 575.49 lacs as on March 31,2011.

COMPANY PROFILE
Muthoot Finance, Indias largest gold loan company is the first choice of Indians who want to make their dream a reality. May the dream be to start their own business or to buy their own home, for over 124 years Muthoot Finance has helped almost every Indians dream come true. Trusted by over 70000 customers everyday, Muthoot Finance Gold Loan has services and products that fit the need of any customer, making it the quickest, most convenient and safest way to take a gold loan Key features of Gold Loan: Loan disbursal in 5 minutesLoans starts from 1,500 to1Crore Minimal documentation and credit assessment requirementsHigh quality customer service in short response timeEvaluation of gold ornaments takes place in house. Safety of Gold Ornaments: All branches as equipped with Strong Rooms for keeping safe custody of Gold Ornaments Gold Loan available at over 3,000 Muthoot Finance branches across India0% processing feesPre-payment option-without any penalty. GOLD LOAN SCHEMES:

Gold Coins: Now invest your wealth in the ever rising power of Gold with the Muthoot Precious Metals Corporation. 24 carat Pure Gold Coins: Muthoot Precious Metals Corporation presents Gold Coins with 999% purity (24 Carat). Invest in safe, secure and profitable Gold Coins. The Gold Coins hold many advantages: 999% pureFinance schemes with easy monthly installmentsAppreciating assetHigher return on investment with no risksAvailable in denominations such as 2g, 4g, 8g, 20g and 50g to suit every pocketThe ideal gift for your near and dear ones. Silver Coins: 999% pure Silver CoinsOne of India's few financial players that deals in Silver CoinsAvailable in 50 gm and 100gm Available at over3,000 Muthoot Finance brances across India.

BOARD OF MAMBER
Mr, George Joseph and Mr John K Paul have joined the Board of Directors as independent Directors during the year. Mrs. Anna Alexander and Mrs. Sana George have resigned from the Board of Directors effective July 21, 2010. Board place on record their deep sense of appreciation for the services rendered by them during their tenure in the Boa rd of Directors of the Company. In accordance with Article 110 of the Articles of Association of the Company, Mr K John Mathew and Mr. George Jacob Muthoot retire by rotation at the ensuing Annual General Meeting. Both of them being eligible seek, re-appointment at the Annual General Meeting. Name M G George Muthoot George Thomas Muthoot P George Varghese John K Paul George Alexander Muthoot George Jacob Muthoot K John Mathew Designation Chairman & Wholetime Director Whole Time Director Independent Director Independent Director Managing Director Whole Time Director Independent Director

MARKETING STRATEGY OF MUTHOOT FINANCE

1. Dividend- Your Board of Directors has decided to plough back the entire profit for the year and retain the same in the Profit and Loss Account further strengthening your Company''s net owned funds position. 2.Resource Mobilization(a) Secured Debentures: During the year, Company raised Rs. 126397 Lacs, net of repayments, through private placement of Secured Non-Convertible Debentures. Funds raised through this routs continue to be a substantial resource base for the Company. Company has also privately placed Secured NonConvertible Debentures to the tune of Rs. 21500 lacs which are listed in the Wholesale Debt Segment of the National Stock Exchange of India Limited. (b)Bank Finance:Commercial Banks continued their support of the company''s aggressive asset growth. As of 31 March. 2011, borrowings from banks held at Rs. 605282 lacs. The company also raised resources through sell down of gold loan portfolio such that the outstanding amount of gold loan sold under bilateral assignment as of 31'' March. 2011 was Rs. 41G639 lacs. Your company''s rated short term debt instruments were also placed with various mutual funds at competitive rates enabling the company to reduce the overall cost of liabilities.

(c)Subordinated Debts:Subordinated Debts continue to be another source for funding the operations of Company. Subordinated Debts represents long term source of funds for the Company and the amount outstanding as on 31* March, 2011 was Rs. 71050 lacs. It will qualify as Tier II capital under the Non- Ban king Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank Directions). 2007. 3.Ratings-The company is rated by CRISIL for Rs.4000 crones of Short Term Debt Programme with a rating of CRISIL A1 This is the highest credit quality rating assigned by CRISIL to short term debt instruments. CRISIL A1 rating indicates that the degree of safety with regard to timely payment of interest and principal is very strong. CRFSIL has also assigned the company with a long term rating of CRTSIL AA- (stable) for Rs.500 crores Non-Convertible Debenture issue and for Rs.100 crones Subordinated Debt issue. This rating Indicates high degree of safety with regard to timely payment of interest and principal on the Instrument. The company is also rated by ICRA for Rs.200 crores of Short Term Debt Programme with a rating of [ICRA] A1 , This is the highest credit quality rating assigned by ICRA to short term debt instruments which indicates Lowest credit Risk and stronger credit quality. ICRA has also assigned the company for Rs.200crs Non-Convertible Debenture issue and for Rs.100crs Subordinated Debt issue with a long term rating of [ICRA) AA-1 Stable*. Instruments rated in this category carry lowest credit risk and it indicates high quality credit rating. Further, ICRA has also assigned the company with Long Term/Short Term rating of [ICRA] AA- ''/[ICRA] A1 '' respectively for Rs.6000 crones of Bank

loans which indicates high quality credit rating and lowest credit risk / stronger credit quality and Lowest credit Risk respectively. 6. Initial Public Offer

During the month of April, 2011, your Company has completed an Initial Public Offer of 5.15.00,000 Equity Shares of Rs. 10/- each at a price of Rs. 175/- raising Rs. 901.25 crores. The issue had seen an overwhelming success with an oversubscription of 24.33 times. The shares of the Company were listed on National Stock Exchange of India Limited and Bombay Stock Exchange Limited on 6th May 2011. 4.InternalControl-TheAudit and Inspection Department of the company through a team of 704 personnel ensures quality of the assets pledged and adherence to various risk management practices at the branch and regional office level. The structure of the audit teams has been totally recast with decentralization of functions to match with the expansion in footprint without compromising control. The internal audit team directly reports to the Audit Committee of the Company The audit committee oversees the functioning of the audit team and reviews the effectiveness of internal control at all levels apart from laying down constructive suggestions for improving the audit function in the Company. The present reporting structure ensures independence of the internal audit function and embodies best corporate governance practices.

5.Human Resources- Being a service oriented Company, your company consider human resource capital as the biggest asset. As of March 31, 2011, your company has 16668 employees on payroll at various management levels, Your Company offer employees the opportunity to harness their Inherent skills and to brave newer frontiers at every phase of their growth. Your management is committed In providing a wholesome work environment and support with excellent training programs and workshops. Your Company provides extensive training to branch employees through training programs that are tailored to appraising the gold content in gold jewellery. Anew employee is introduced to the business through an orientation program and through training programs covering job-appropriate topics. The experienced branch employee receives additional training and an introduction to the fundamentals of management to acquire the skills necessary to move into management positions within the organization. Manager training involves a program that includes additional management principles and more extensive training in topics such as income maximization, business development, staff motivation, customer relations and cost efficiency. As of date, your company has established two staff training colleges, one each in Cochin and in New Delhi, and three regional training centers located in Chennai, Hyderabad and in Bangalore, and is in the process of establishing staff training colleges at other region allocations as well. 6.Public Deposits- the company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of Balance Sheet.

7.Capital Adequacy- As at 31st March. 2011. the capital adequacy of the company stood at 15.82% as against the statutory requirement of 15%. 8.RBIGuidelines-Your Company has complied with all the applicable regulations prescribed by the Reserve Bank of India from time to time. 9. Auditors- M/s Rangamani & Co., Chartered Accountants, the Statutory Auditor of the Company, hold office in accordance with the provisions of the Act upto the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. 10.Directors- Responsibility Statement: As required under the provisions contained in Section 217(2AA) of the Companies Act, 1956 (the Act), your Directors hereby confirm that: 1. In the preparation of Annual Accounts for the financial year 2010-11, the applicable Accounting Standards have been followed and there are no material departures. 2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for financial year. 3. They have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities.

4. The annual accounts have been prepared on a going concern basis. 11.Corporate Governance Report and Management Discussion and Analysis Statement-Your Company has complied with the Corporate Governance norms as stipulated under the Listing Agreement entered into with the Stock Exchanges. Detailed reports on Corporate Governance and Management Discussion and Analysis are annexed to this Report. Conservation of energy, technology absorption, foreign exchange earnings and outgo Since the Company does not carry on manufacturing activities disclosure requirements underCompanies [Disclosure of Particulars in the Report of Board of Directors) Rules, 1956 in this connection are not applicable. However, your Company, being a responsible corporate citizen, has been taking various measures for reducing the energy consumption.

OBJECTIVE OF THE PROJECT

The main objective of project is to prepare the marketing strategy and Advertising of MUTHOOT FINANCE are as under : To know availability and durability of the product and services of muthoot finance . To know whether products are feasible. To know about best quality of muthoot finance . To know about very good services of finance .

LIMITATION

As said a basic research was conducted at the company to enables the company to assess how far the customers are satisfied with product and services of muthoot finance .During the course of the study the following limitations were observed: (a) The method will be unsuitable if the number of persons to be surveyed is very less as it will be difficult to draw logical conclusions regarding the satisfaction level of customers. (b) Interpretation of data may very from individual depending on the individual understanding the product features and services of the company . (c) The method lacks flexibility.In case of inadequate on incomplete information the result may deviate. It is very difficult to check the accuracy of the information provided. (d) Since all the products and services are not widely used by all the customers it is difficult to draw realistic conclusions based on the survey.

SUGGESTIONS The following suggestions are offered to the Muthoot finance :1. As the muthoot finance thus company should launch effective promotional. 2. Wide advertisement showing utility of their product and features of their product should be made. 3. Company may offer gifts scheme from time to time so that he product may attract the masses. 4. 5. The company should lower the price The company should come up with attractive advertising plants. 6. The company should improve its distribution network.

7. The company should also think and implement some public relation programme.

CONCLUSION
1. Customer's priority is on the price, mileage, and look while purhasing muthoot finance . They are not much affected y promotional programs. 2. Dealers expect some promotional schemes/ offers from the company. 3. There are many promotional offers available to the customers like: 4. Company hired many cricketers and actors for promoting the product.

BIBLIOGRAPHY
Marketing Management by Sir Kotler Philip Marketing Research by Sir Sharma D.D. Websites : o Www muthoot finance .com o www.google. Com o www.marketing stratergy of muthoot finance .com

ADVERTISING OF MUTHOOT FINANCE