A Summer Training

In

Indiabulls

1
 Introduction
A learning experience which will go a long way to build
my career in service sector specially in capital market.
The Learning

• Financial Products & their marketing.

• Challenges & level of energy required to be an profitable
employee.
• What a simple task like selling a share take.

2
 Inception
• Indiabulls – Is India’s leading Financial Services and Real
Estate Company. With a great reach to the market with Its
securities, consumer finance, mortgage and real estate
development.

• Founded in the May 2000., When 3 IIT ian’s by the name Mr

Sameer Gehlot, Rajiv Rattan, Saurabh Mittal took over Orbis
Securities. They had a vision to have a online broking system
based on a American concept.

• It started with 2 branch's all over the nation and a handful

employees. Currently It have more than 640 branches all over
India, and a huge client base of 4,50,000 customers , served
by around 4000 relationship managers and several support
staffs (comprised of dealers and back office staff).
3
Branch Network and Employee growth

IBL Footprint Increasing No of Branches Increasing Number of RMs

No of Branches No of RMs
5,000
700 650 4,500
4,500
600 4,000
500 3,500
3,000
400
306 2,500 2,100
1,893
300 241 2,000

200 1,500
148 970
1,000
100 63 476
25 500 124
0 0
1 branch
2-5 branches Mar- Mar- Mar- Jun- Mar- Jan- Mar- Mar- Mar- Jun- Dec- Jan-
> 5 branches 03 04 05 05 06 07 03 04 05 05 06 07

650
650 Branches
Branches across
across 145
145 cities
cities Branch
Branch Network
Network Employee
Employee Strength
Strength

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 Diversified Business groups
Securities &
Secured
Derivatives
Financing
Broking

Mortgage & Financial

Housing Products
Finance Distribution

Consumer
Financing
 Growing Customer base

Increasing Number of Customers

500,000
450,000
450,000
400,000
350,000
300,000
235,000
250,000
200,000 178,800
144,000
150,000 108,324
100,000 79,932

50,000 16,455 30,498

0
Mar-03 Mar-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 2007 Jan

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 Regional Hierarchy

SENIOR VICE PRESIDENT

REGIONAL MANAGER

BRANCH MANAGER/
SENIOR SALES MANAGER
Support Sales
System Functions

Back office Local

RM/SRM
Executive Compliance
Officer

Dealer ARM
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 Financial Comparisons
Net Sales Operating Profit Ratio
Net sales Operating Profit Ratio

450 100
400 90
350 80
300 70
250 60
50
200
40
150 30
100 20
50 10
0 0
5-Mar 4-Mar 5-Mar 4-Mar 5-Mar 4-Mar 5-Mar 4-Mar 5-Mar 4-Mar 5-Mar 4-Mar

Kotak ICICI Indiabulls Kotak ICICI Indiabulls

Rs in crores (%)

• Indiabulls stands third in • Indiabulls

operating profit ratio is
revenue generation, with below industrial average by
largest client base around 20 %
• It’s CAGR is 184 % (03-06) • This shows its inefficiency in
managing cost.
while ICICI CAGR is 114 %
(03-06) 8
 Continued…
Return On Capital Employed Return On Equity
ROCE(%) ROE(%)

80 70
70 60
60 50
50 40
40
30
30
20 20
10 10
0 0
5-Mar 4-Mar 5-Mar 4-Mar 5-Mar 4-Mar 5-Mar 4-Mar 5-Mar 4-Mar 5-Mar 4-Mar

Kotak ICICI Indiabulls Kotak ICICI Indiabulls

(%) (%)

• Indiabulls stands second in • The difference in Return on

terms of return to the cost of Equity is not huge between
capital, but there is huge Indiabulls & Kotak, it means
difference between first and that Indiabulls major share
second. capital is funded by bonds
• Also proves that dividend
pay off can be high. 9
 Web

Internet WebServer

Independent
C FinancialAdvisor
U
S WA P CentralisedRiskManagementSystem
T Gateway

O MobilePhone
TransactionEngine
M VirtualP rivate
E Netw ork
connectingall
R branches

Telebroking

T elephoneto
E-mail/SMS C ustom er NSEBSEDepositaryCMAM.Funds InstaCash
C are
/Investm ent
A dvisor
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 Trading Products
Basically provide three products for trading. They are
• Cash account
• Intraday account
• Margin trading (Mantra)

Cash account provides the client to buy 4 times of cash balance

in his trading account.
Intraday product provides the client to buy 8 times of his cash
balance in the trading account.
Mantra account – called as margin trading, is a special account
to buy on leverage for a longer duration.

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 Funding
Indiabulls provides funding for A category shares
bought.

These funds are to be paid back to Indiabulls on the

T+2nd day, other wise the stocks will be sold off up to
the extant of negative cash, on the T+5th day.
This is provided to all clients by default. After the T+2nd
day client will be charged delayed payment charges.

• (Stock margin + cash margin)* 4 =Delivery

• (Cash Margin + Stock margin)*8 = Intraday
• (Cash margin + Stock Margin)= futures
• Cash Margin * 2 = Margin trading
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 Trading charges

• The trading attracts a brokerage of

• 0.5 % of total transaction value for Delivery (on both buying
leg as well as selling leg)
• 0.1% of total transaction value for intraday (on both buying
leg as well as selling leg)
• 0.1% of total transaction value for F&O (on both buying leg as
well as selling leg).

• Service tax of 12.24% on the brokerage is applicable for all

the above
• Other taxes and stamp duties are also levied (based on the
charges as per prevailing rates).

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 Derivatives
Derivatives are instruments whose value is ‘derived’, in whole or in
part, from the value of one or more underlying assets.

In India we have several derivatives, two of the most famous

derivatives traded on National stock exchange are
•Futures
•Option

Derivatives act as a hedging tool

• Straddle Buy one Call and one Put at the same strike rate
• Stranger Buy one Call and one Put at different strike rates
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 Portfolio Management
A collection of investments held by an institution or a private
individual. Holding a portfolio is often part of an investment and risk-
limiting strategy called diversification. By owning several assets,
certain types of risk (in particular specific risk) can be reduced

Designed Portfolio
• Standard Deviation measure the risk
• Reduced standard of combined assets
• Can be aligned with Index Fund (example NIFTY)

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 Observation & Suggestion
• High turnover ratio of Relation Managers (RM)

• Lack of specialized suggestions & tips.

• There should be an increase in TA for RMs

• Firm should provide database to RMs

• A fresh advertisement campaign is required.

• A New Plan
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