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ANALYSIS OF INVESTMENT PATTERN OF INDIVIDUAL INVESTORS

Under the Guidance of: Mr .Ashish Agrawal Branch SalesManager, Axis Bank Varanasi

Made by: ITEE BERI ROLL NO.13 M.B.A.3rd SEM

Flow of Presentation
COMPANY PROFILE RESEARCH METHODOLOGY DATA PRESENTATION & ANALYSIS FINDINGS SUGGESTIONS LIMITATIONS
2 Analysis of investment pattern of individual investors

COMPANY PROFILE
y Axis Bank (erstwhile UTI Bank) was the first of the new

private banks to have begun operations in 1994. y The Bank was set up with a capital of Rs. 115 crore, with UTI contributing Rs. 100 crores(27.08%), LIC - Rs. 7.5 crores(10.36%) and GIC and its four subsidiaries contributing Rs. 6 crores(4.96%). y The Bank has a very wide network of more than 827 branches and Extension Counters (as on 31st March 2009).The Bank has a network of over 3595 ATMs (as on 31st March 2009). y In July 2007 UTI Bank re-branded itself as Axis Bank.
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COMPANY PROFILE ANALYSIS OF FINANCIAL STATEMENT


Key Financial Metrics (in billion 2007-2008 INR) 2008-2009 Growth over previous year

Net Profit

10.71

18.13

69% 35%

Total Assets Financial Ratios


EPS Return on Assets Capital Adequacy Ratio Non-Performing Assets
4

1096

1477

Rs. 32.15 1.24% 13.73% 0.36%

Rs. 50.61 1.44% 13.69% 0.35%

SWOT ANALYSIS OF AXIS BANK


STRENGTHS
Promoted by Public Sector Undertakings Among the leading private sector banks Segmented Product Lines

WEAKNESSES
Low brand awareness

OPPORTUNITIES

SWOT

THREATS

Increasing customers preferences towards Private sector banks. Large untapped rural market.

Stiff competition

Analysis of investment pattern of individual investors

Research methodology Research objectives:


To have an insight about the investment avenues available for individual investors.

To analyze the investment pattern of individual investors. To suggest means to the bank for more cost effective functioning.

Analysis of investment pattern of individual investors

Research Design
Research design: Analytical research design
SAMPLE DESIGN
Population Sampling Unit Sample size Sampling technique Data Collection Tool Location Duration Individual in Varanasi region

Individuals
150 Non probability sampling technique Convenience Sampling

Questionnaire Varanasi Eight weeks

Analysis of investment pattern of individual investors

Data Collection &Analysis


Primary data Data collection design Secondary data Sample survey Reports and Brochures of banks

Data Presentation Data analysisTool

Through bar & pie charts SPSS

Analysis of investment pattern of individual investors

INVESTMENT OPTIONS FOR INDIVIDUALS


Short term investment options
Savings Bank Account

Medium-Long Term investment options


Bank Fixed Deposits Mutual Funds Shares Gold Post Office Saving Schemes

Long Term Investment options


Public Provident Funds

Money market Mutual Funds

Bonds & Debentures Company Fixed Deosits

Life Insurance

Analysis of investment pattern of individual investors

INVESTMENT OPTIONS FOR INDIVIDUALS: on the basis of risk


SHARES MONEY MARKET INSTRUMENTS GOLD HIGH RISK UNIT LINKED INSURANCE PLANS

MUTUAL FUNDS MODERATE FIXED DEPOSITS WITH COMPANIES

RISK
PUBLIC PROVIDENT FUNDS POST OFFICE SAVING SCHEMES BANK FIXED DEPOSITS BONDS & DEBENTURES

LOW RISK
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Analysis of investment pattern of individual investors

WHAT INFLUENCES INVESTMENT DECISIONS?


RISK APPETITE FINANCIAL GOALS INVESTMENT HORIZON

INVESTMENT DECISION

INVESTIBLE SURPLUS EXPECTED RETURNS

LEVEL OF KNOWLEDGE

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Analysis of investment pattern of individual investors

Data Presentation & Analysis

Do you make investments?

9%

YES NO

91%

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Analysis of investment pattern of individual investors

CONCERN FOR RISK How much risk are you willing to bear?

LOW RISK 35%

HIGH RISK 23%

MODERATE RISK 42%


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Analysis of investment pattern of individual investors

TENURE OF INVESTMENT Which of the following investment horizons do you feel most suitable?
>20yrs 8% <5yrs 35%

10-20yrs 13%

5-10 yrs 44%


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INVESTMENT OPTION PREFERRED Which of the following investment options do you find most suitable for investment?

GOLD, 10.70% FD, 20% LI, 21%

GOVT SEC, 3%

SHARES, 16%

BONDS, 1.30%

MF, 28%

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Analysis of investment pattern of individual investors

FACTORS CONSIDERED WHILE CHOOSING INVESTMENT OPTIONS

Which of the following factors do you find most crucial in choosing an investment option
70% 60% 50% 40% 30% 20% 10% 0% 61%

29% 20% 3% COMPANY RETURN RISK CHARGES

FINANCIAL GOALS What are your future goals for investment?

all savings purchase assets children education Retirement

20% 47% 20% 19% 20%

PERCEPTION OF AN INDIVIDUAL ABOUT HIS AWARENESS OF INVESTMENT How would you describe your knowledge about investing?

In-depth 3% Good 31%

Little or No 24%

Some 42%

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Analysis of investment pattern of individual investors

FINANCIAL ADVISORY SERVICES AVAILED Do you avail the services of financial advisors?

YES 29%

NO 71%

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Analysis of investment pattern of individual investors

If you are given a better option for investment, will you go for it

NO 27%

YES 73%

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Analysis of investment pattern of individual investors

FUTURE INVESTMENTS PLANS Do you want to know about any of the following investment options in future?

40% 30% 20% 10% 0% FD

32% 1.30% 12%

28% 11.30%

8%

7.30%

MF

bonds

LI

Gold

Govt.Sec

SHARES

Break-up of respondents
Age wise
55-64yrs 7% 65+ 0%

Income category

>30,000 8%
40-54yrs 27% <30 yrs 37%

20,00030,000 17%

<Rs.12,500 45%

15,00020,000 8%

30-39yrs 29%

15,50015,000 22%

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Age-wise distribution of risk apetite


70%

60%
60%

55%
50%

46% 40%

40%

36% 29% 25% 28%

36%

35.00%

High Moderat e Low

30%

20%

10.00%
10%

0%
0% <30 30-39 40-54 55+

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Analysis of investment pattern of individual investors

Income wise Break-up of Investment Options Preferred


12.0% 10.7% 10.0% 9.3% 8.0% 8.0% 6.7% 6.0% 4.0% 4.0% 4.0% 2.7% 2.0% .0% FD shares MF Debt LI Gold & property Govt. securities 1.3% 2.7% 2.7% 1.3% 1.3% 2.7% 1.3% 1.3% 1.3% 1.3% Rs.20,000-30,000 >Rs.30,000 6.7% 6.7% 6.7% <Rs.12,500 Rs.12,500-15,000 Rs.15,000-20,000 8.0% 9.3%

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Analysis of investment pattern of individual investors

Analysis of Data with SPSS


Correlation ANOVA VIF

(r) age & risk 0.259

income & (-)0.240 risk Tabulated values


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7.196 2.99

1.151

Analysis of investment pattern of individual investors

FINDINGS
1.The investors prefer to take moderate risk so that they can get adequate return. The risk appetite of the investors is inversely proportional to their age. 2.The investors mainly invest for the purpose of savings. 3.Mutual fund is preferred mostly by people with young age. Old age investors mostly prefer fixed income options. 4. The investors were ready to go for better options if given by bank. 5.Most of the investors were disappointed by the transparency of the companies in relation to charges, particularly in case of life insurance.
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Analysis of investment pattern of individual investors

FINDINGS
6. Most of the investors are not having financial advisors. 7.The investors were willing to go for mutual fund for future investment but only through the agents they have consulted earlier. 8. The investors are not willing to invest in the stock market directly. The reason behind this can be lack of adequate knowledge. 9. Most of the investors were not aware of the financial services provided by bank.

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Analysis of investment pattern of individual investors

SUGGESTIONS:
1.

The investors should be made aware of all the details while selling them them any investment avenue. The financial agent must consider the age and risk appetite of the investor before pitching the investment products. The sales personnel must be fully abreast with the features and risk factors related to the financial products.

2.

3.

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Analysis of investment pattern of individual investors

SUGGESTIONS:
4. An attempt can be made by the bank to increase the investment

awareness of the individuals through promotional activities. 5. Once a prospect is converted into a customer, care must be taken about the services which have been promised to him. He must be well informed about the changes regarding market fluctuations so that accordingly he can adjust his investments to minimize risk.

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Limitations
y Due to the time constraint, the study was not able to include more

individuals.
y The reluctance on the part of the individuals was also a major set

back.
y Analysis was based on observation and interpretation on the basis of

sample survey.
y Being a student I undertake this project as a learning experience. I

have made many mistakes and then learned from them.


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QUERIES

THANK YOU