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EXECUTIVE SUMMARY
This project regarding the fundamental analysis of five companies in the banking industry has
been conducted in Hedge Equities, Kaloor for a period of 45 days. The main purpose of this
study was to conduct fundamental analysis. In this project, the scope was limited to the five
securities from the banking sector. But that provided an overall picture of the economy and
the banking industry. The scrip I selected was of HDFC bank, Federal Bank, YES Bank, Axis
Bank and ICICI Bank.
To forecast future stock prices, fundamental analysis combines economic, industry, and
company analysis to derive a stock’s fair value called intrinsic value. If fair value is not equal
to the current stock price, fundamental analysts believe that the stock is either over or under
valued. Through the study, an attempt has been made to find the intrinsic value of the stock
and compare with market value of the study and to recommend whether to buy, hold or sell
the stock based on the analysis. This project was helpful in understanding whether the price
of the stock is undervalued or overvalued at the current market price. And fundamental
analysis gave a better foundation for investment decisions.
The data for the study was collected from the annual reports and websites of the five
companies in the banking sector. The collected data was analysed through the various
analysis techniques like Economic analysis, Industry analysis, company analysis, CAMEL
Rating and Intrinsic value calculation.

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1. INTRODUCTION TO STUDY
1.1. INTRODUCTION
Investment is putting money into something with the expectation of profit. More specifically,
investment is the commitment of money or capital to the purchase of financial instruments or
other assets so as to gain profitable returns in the form of interest, dividends, or appreciation
of the value of the instrument (capital gains). An investment involves the choice by an
individual or an organization, such as a pension fund, after some analysis or thought, to place
or lend money in a vehicle, instrument or asset, such as property, commodity, stock, bond,
financial derivatives (e.g. futures or options), or the foreign asset denominated in foreign
currency, that has certain level of risk and provides the possibility of generating returns over
a period of time.
Investment comes with the risk of the loss of the principal sum. The investment that has not
been thoroughly analyzed can be highly risky with respect to the investment owner because
the possibility of losing money is not within the owner's control. The difference
between speculation and investment can be subtle. It depends on the investment owner's mind
whether the purpose is for lending the resource to someone else for economic purpose or not.
In the view of fundamental analysis, stock valuation based on fundamentals aims to give an
estimate of their intrinsic value of the stock, based on predictions of the future cash flows and
profitability of the business. Fundamental analysis may be replaced or augmented by market
criteria. As an approach to investment analysis, technical analysis is radically different from
fundamental analysis. Technical analysts don’t evaluate a large number of fundamental
factors relating to the company, the industry and the economy. Instead they analyze market
generated data like prices and volumes to determine the future direction of price movement.
1.2. BACKGROUND OF STUDY
The fundamental analysis is all about getting an understanding of a company, the health of
its business and its future prospects. It includes reading and analyzing annual reports and
financial statements to get an understanding of the company's comparative advantages,
competitors and its market environment. Fundamental analysis is built on the idea that the
stock market may price a company wrong from time to time. Profits can be made by finding
underpriced stocks and waiting for the market to adjust the valuation of the company.

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This project is helpful in understanding whether the price of the stock is undervalued or
overvalued at the current market price. And fundamental analysis will give a better
foundation for investment decisions.
1.3. STATEMENT OF THE PROBLEM
The purpose of this study is to forecast the future stock price, the fundamental analysis
incudes the industry analysis, company analysis and economic analysis which help us to
derive a stock’s fair price value called the intrinsic value. Therefore valuation is required in
order to find whether the price of stock is undervalued or overvalued at the current market
price. From this valuation we can reach a conclusion whether it maximizes the return or
minimizes the risk.
1.4. SCOPE OF THE STUDY
The present study mainly focused on the last 3 year performance of the selected banking
companies based in India. This study reveals the various factors that are to be considered for
the fundamental analysis of the companies. In the investor point of view, this study will help
them to understand the price changes of shares. Also this will definitely enable them to find
out how the shares are performed in the last 3 years. For the new investors, this study will
serve as a guideline to know about the investment pattern of the banking sector and also
select good performance companies.
In my project, the scope is limited to the five securities from the banking sector. But this will
provide an overall picture of the economy and the banking industry. The scrip I have selected
is:
 HDFC Bank
 Federal Bank
 YES Bank
 Axis Bank
 ICICI Bank
The global economy, Indian economy, banking industry and the performance of the above
scrip are analyzed.

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1.5. OBJECTIVES OF THE STUDY
Primary objective:
Fundamental analysis of five private banks in India with a special reference to Hedge
Equities.
Secondaryobjective:
 To analyzed the profitability and price earnings capacity of the banks
 To study about how the fundamental factors are affecting the stock prices.
 To evaluate the main attribute which traders and investors look while trading in
banking companies.
 To offered for valid suggestions to the growth of the investors.
 To know more about secondary market.
 To identify the best investment decision.
 To understand about Indian banking performance.
 To understand, how major economic indicators affects the banking performance
 To understand the macroeconomic variables those will an impact on the company
progress.
 To study the various trends, opportunities, challenges of the industry in which the
company operates.
 Find the intrinsic value of the stock and compare with market value.
 To know whether the stock price is undervalued or overvalued using fundamental
analysis.
1.6. RESEARCH DESIGN
There are different types of research types. The one used here is empirical research.
Empirical research is research using empirical evidence. It is a way of gaining knowledge by
means of direct and indirect observation or experience. Empiricism values such research
more than other kinds. Empirical evidence (the record of one's direct observations or
experiences) can be analyzed quantitatively or qualitatively. Through quantifying the
evidence or making sense of it in qualitative form, a researcher can answer empirical
questions, which should be clearly defined and answerable with the evidence collected

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(usually called data). Research design varies by field and by the question being investigated.
Many researchers combine qualitative and quantitative forms of analysis to better answer
questions which cannot be studied in laboratory settings, particularly in the social sciences
and in education.
Data collection is mainly done through secondary sources. The secondary sources used are
 Annual reports
 www. Moneycontrol.com
 www. Economictimes.com
 NSE.india
 www.tradingeconomics.com
1.7 LIMITATION OF THE STUDY
 The study was confined only to one particular sector.
 The study was more confined with secondary data.
 The study was done for a short period of time, which might not hold true over a long
period of time.
 The economy and industry are so wide and broad that is difficult to include all the
likely factors influencing the performance of bank.
 There is no guarantee that what happened in the past will continue in the future.
 Analysis is done only on the basis of some factors therefore percent accuracy is not
possible.
 Finally the study is not from inherent limitation of collection and analysis of the
source of data.

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2. CONCEPTUAL FRAMEWORK & LITERATURE REVIEW
2.1. CONCEPTUAL FRAMEWORK
Fundamental analysis is the examination of the underlying forces that affect the well-being of
the economy, industry groups and companies. As with most analysis, the goal is to develop a
forecast of future price movement and profit from it. At the company level, fundamental
analysis may involve examination of financial data, management, business concept and
competition. At the industry level, there might be an examination of supply and demand
forces of the products. For the national economy, fundamental analysis might focus on
economic data to assess the present and future growth of the economy.
To forecast future stock prices, fundamental analysis combines economic, industry, and
company analysis to derive a stock’s fair value called intrinsic value. If fair value is not equal
to the current stock price, fundamental analysts believe that the stock is either over or under
valued. As the current market price will ultimately gravitate towards fair value, the fair value
should be estimated to decide whether to buy the security or not. By believing that prices do
not accurately reflect all available information, fundamental analysts look to capitalize on
perceived price discrepancies.
Fundamental Analysis is a method of evaluating a security by attempting to measure its
intrinsic value by examining related economic, financial and other qualitative and
quantitative factors. Fundamental analysts attempt to study everything that can affect the
security’s value, including macroeconomic factors (like the overall economy and industry
conditions) and individual specific factors (like the financial condition and management of
companies).
2.1.1. Three Phases of Fundamental Analysis
(a).Understanding of the macro-economic environment and developments (Economic
Analysis)
(b).Analyzing the prospects of the industry to which the firm belongs (Industry Analysis)
(c).Assessing the projected performance of the company (Company Analysis)

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Phase Nature of Purpose Tools and techniques
Analysis
FIRST Economic To access the general Economic indicators
Analysis economic Situation of the
nation.
SECOND Industry Analysis To assess the prospects of SWOT analysis
various industry groupings.
THIRD Company Analysis To analyse the Financial and Analysis of Financial
Non-financial aspects of a aspects: Sales,
company to determine Profitability, EPS etc.
whether to buy, sell or hold Analysis of Non-financial
the shares of a company. aspects: management,
corporate image, product
quality etc.
Table no.1:Phases of fundamental analysis
2.1.2.Strengths of Fundamental Analysis
 Long-term Trends
Fundamental analysis is good for long term investments based on long-term trends. The
ability to identify and predict long-term economic, demographic, technological or consumer
trends can benefit investors and helps in picking the right industry groups or companies.
 Value Spotting
Sound fundamental analysis will help identify companies that represent a good value. Some
of the most legendary investors think for long-term and value. Fundamental analysis can
help uncover the companies with valuable assets, a strong balance sheet and stable earnings.
 Business Acumen
One of the most obvious, but less tangible rewards of fundamental analysis is the

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development of a thorough understanding of the business. After such painstaking research
and analysis, an investor will be familiar with the key revenue and profit drivers behind a
company. Earnings and earnings expectations can be potent drivers of equity prices. A good
understanding can help investors avoid companies that are prone to shortfalls and identify
those that continue to deliver.
 Value Drivers
In addition to understanding the business, fundamental analysis allows investors to develop
an understanding of the key value drivers within the company. A stock’s price is heavily
influenced by the industry group. By studying these groups, investors can better position
themselves to identify opportunities that are high-risk (tech), low-risk (utilities), growth
oriented (computer), value driven (oil), non-cyclical (consumer staples), cyclical
(transportation) etc.
 Knowing Who is Who
Stocks move as a group. Knowing a company’s business, investors can better categorize
stocks within their relevant industry group that can make a huge difference in relative
valuations. The primary motive of buying a share is to sell it subsequently at a higher price.
In many cases, dividends are also to be expected. Thus, dividends and price changes
constitute the return from investing in shares. Consequently, an investor would be interested
to know the dividend to be paid on the share in the future as also the future price of the share.
These values can only be estimated and not predicted with certainty. These values are
primarily determined by the performance of the company which in turn is influenced by the
performance of the industry to which the company belongs and the general economic and
socio-political scenario of the country.
An investor who would like to be rational and scientific in his investment activity has to
evaluate a lot of information about the past performance and the expected future performance
of companies, industries and the economy as a whole before taking investment decision. Each
share is assumed to have an economic worth based on its present and future earning capacity.
This is called its intrinsic value or fundamental value. The purpose of fundamental analysis is
to evaluate the present and future earning capacity of a share based on the economy, industry
and company fundamentals and thereby assess the intrinsic value of the share. The investor
can then compare the intrinsic value of the share with the prevailing market price to arrive at

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an investment decision. If the market price of the share is lower than its intrinsic value, the
investor would decide to buy the share as it is underpriced. The price of such a share is
expected to move up in future to match with its intrinsic value.
On the contrary, when the market price of a share is higher than its intrinsic value, it is
perceived to be overpriced. The market price of such a share is expected to come down in
future and hence, the investor would decide to sell such a share. Fundamental analysis thus
provides an analytical framework for rational investment decision-making. Fundamental
analysis insists that no one should purchase or sell a share on the basis of tips and rumours.
The fundamental approach calls upon the investor to make his buy or sell decision on the
basis of a detailed analysis of the information about the company, the industry to which the
company belongs, and the economy. This results in informed investing.
The fundamental analysis can be valuable, but it should be approached with caution. If you
are reading research written by a sell-side analyst, it is important to be familiar with the
analyst behind the report. We all have personal biases, and every analyst has some sort of
bias. There is nothing wrong with this, and the research can still be of great value. Learn what
the ratings mean and track the record of an analyst before jumping to a conclusion. Corporate
statements and press releases of a company offer good information, but they should be read
with a healthy degree of skepticism to separate the facts from the spin. Press releases don’t
happen by accident; they are an important PR tool for companies. Investors should become
skilled readers to weed out the important information and ignore the hype.

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2.2. LITERATURE REVIEW
Joshi (1986) in his study of all scheduled commercial banks operating in India analyse the
profitability and profit planning related to the period 1970 – 1982. The study discusses and
trends in profits and profitability of commercial bank nationalization. The factors leading to
the deterioration of profitability are highlighted.
Minakshi and Kaur (1990) attempted to measure quantitatively the impact of the various
instruments of monetary policy on the profitability of commercial banks. The study
empirically proves that pre-liberalization banking being highly regulated and controlled
industry, has suffered a lot so far as profitability concerned. The bank rates and reserve
requirements ratio has played a significant role in having a negative impact on the bank’s
profitability.
Ojha (1992) in his study attempts to measure the productivity of public sector commercial
banks in India. After identifying various measures of productivity like total assets per
employee, total credit per employee, total deposits per employee, pre-tax profits per
employee, net profit per employee, working funds per employee, ratio of establishment
expenses to working funds and net interest per employee, comparison is made with the
banks at the international level. The study concludes the Indian banks have very less
productivity ratio compared with western countries. Since in his study a comparison has
been made of Indian public sector banks, which have to perform other social functions
unlike western commercial banks.
Ho Sein Khanifar (2012) studied the factors affecting investor’s decision by performing
fundamental analysis. The analysis is performed by studying economy, industry and then
firm. The population included in the study was broking firm at Tehram stock exchange. The
study shows that EPS, profit margin, P/E ratio, sales have highest importance in analysis
decision followed by economy related factor and industry related factor.

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3. INDUSTRY PROFILE
3.1 INTRODUCTION
A financial market is a market in which people and entities can trade
financial securities, commodities, and other fungible items of value at low transaction costs
and at prices that reflect supply and demand. Securities include stocks and bonds, and
commodities include precious metals or agricultural goods. There are both general markets
(where many commodities are traded) and specialized markets (where only one commodity is
traded). Markets work by placing many interested buyers and sellers, including households,
firms, and government agencies, in one "place", thus making it easier for them to find each
other. An economy which relies primarily on interactions between buyers and sellers to
allocate resources is known as a market economy in contras t either to a command
economy or to a non-market economy such as a gift economy
3.2 HISTORY OF THE INDIAN CAPITAL MARKET
The history of the capital market in India dates back to the eighteenth century when East
India Company securities were traded in the country. Until the end of the nineteenth century
securities trading was unorganized and the main trading centers were Bombay (now Mumbai)
and Calcutta (now Kolkata). Of the two, Bombay was the chief trading center wherein bank
shares were the major trading stock During the American Civil War (1860-61). Bombay was
an important source of supply for cotton. Hence, trading activities flourished during the
period, resulting in a boom in share prices. This boom, the first in the history of the Indian
capital market lasted for a half a decade. The bubble burst on July 1, 1865 when there was
tremendous slump in share prices.
The capital market was not well organized and developed during the British rule because the
British government was not interested in the economic growth of the country. As a result
many foreign companies depended on the London capital market for funds rather than in the
Indian capital market.

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3.3 FINANCIAL SERVICES INDUSTRY
Financial services industry encompasses a broad range of organizations that manage money
including credit unions, commercial bank, investment banks, credit card companies,
insurance companies, accountancy companies, consumer finance companies, stock
brokerages, investment funds and some government sponsored enterprises. If we talk about
Indian financial services industry, it is a bank dominated financial industry. Commercial
banks accounts for 60% assets in the Indian financial system, which is followed by insurance
companies. Many NBFCs operates in specialized segments like leasing, factoring,
microfinance, infrastructure finance etc.
Indian financial system is carried out by different regulatory authorities. Reserve bank of
India (RBI) regulates the major part of financial System. Some financial institutions also play
a role of regulatory body for other institutions in the financial sector. NABARD, NHB, and
DCA are the example of such type of regulatory body. SEBI regulates the capital market,
mutual fund and capital market intermediaries. Insurance sector is regulated by IRDA.
Similarly PFRDA regulates pension fund.
3.4 FINANCIAL MARKET
In Broad term describing any marketplace where buyers and sellers participate in the trade of
assets such as equities, bonds, currencies and derivatives. Financial markets are typically
defined by having transparent pricing, basic regulations on trading, costs and fees and market
forces determining the prices of securities that trade.
Indian financial market has witnessed a rapid growth after economic liberalization in India.
The market capitalization of the equity market (National Stock Exchange) has grown from
approximately 6.5 trillion in 2000-01 to approximately 60 trillion in 2009-10 and further to
approximately 61 trillion in 2011-12. The total corporate debt outstanding which stood at 7.9
trillion in June 2010 has grown to 12.9 trillion in March 2013. The outstanding CP has grown
from 575 million in 2003 to 11 billion in 2013. Similarly, outstanding CD has grown from 91
million in March 2003 to 39 billion as on March 22, 2013.
Financial market is basically segmented into two parts:-
 Money market
 Capital market

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3.4.1. Money Market
Money market is that segment of financial market where short term funds are dealt with i.e.
money market deals in those kinds of financial assets which maturity period is not more than
one year. RBI is at the apex of Indian money market. Banks are the main players in Indian
money market. Apart from commercial and co-operative banks some NBFCs and financial
institutions like LIC, GIC, and UTI etc. also take part in Indian money market. Instruments of
money market are Call money, Treasury bills, Commercial papers, Certificate of deposits.
3.4.2. Capital market
Capital market is that segment of financial market where medium and long term securities are
dealt with. It constitutes of long term borrowings from banks and financial institutions,
borrowing from foreign markets, raising capital by issuing share, bond, debentures etc. Indian
capital market has also witnessed a huge growth and changes after early 1990s. A growing
economy like India, where more than 15 million youth are added to workforce every year,
needs huge investment on a continuous basis for new capacity as well as for expansion,
renovation and modernization of existing productive capacity and creation of supporting
infrastructure. Indian capital market has huge potential to grow. Over the past two decades,
Indian regulators have taken the path towards tighter regulations. As a result, in relative
terms, our capital markets have been less vulnerable to crises or frauds. Quite justifiably, our
regulators and government officials are proud about this. We have a robust regulatory
structure in place for the capital markets. However, the flip side is that they are not geared to
meet the capital requirement to realize the growth potential of the economy. India has
tremendous potential to sustain higher economic growth compared with china because of
favourable demographics and the enterprising nature of its people. India can sustain double–
digit economic growth for at least a couple of decades more, which can lift millions of people
out of poverty as has been the case with china, Singapore and many other countries.
Capital markets are further segmented into two parts: - a) Primary market, b) Secondary
market
 Primary market
A market that issues new securities on an exchange. Companies, governments and other
groups obtain financing through debt or equity based securities. Primary markets are
facilitated by underwriting groups, which consist of investment banks that will set a

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beginning price range for a given security and then oversee its sale directly to investors. It is
also known as “New Issue market”. In primary market companies go for fund raising through
IPO (initial public offerings). The primary markets are where investors can get first crack at a
new security issuance. The issuing company or group receives cash proceeds from the sale,
which is then used to fund operations or expand the business. Exchanges have varying levels
of requirements which must be met before a security can be sold. Once the initial sale is
complete, further trading is said to conduct on the secondary market, which is where the bulk
of exchange trading occurs each day. Primary markets can see increased volatility over
secondary markets because it is difficult to accurately gauge investor demand for a new
security until several days of trading have occurred.
 Secondary Market
A market where investors purchase securities or assets from other investors, rather than from
issuing companies themselves. The national exchanges - such as the New York Stock
Exchange, NASDAQ, LSE, BSE and NSE are secondary markets. Secondary markets exist
for other securities as well, such as when funds, investment banks, or entities such as Fannie
Mae purchase mortgages from issuing lenders. In any secondary market trade, the cash
proceeds go to an investor rather than to the underlying company/entity directly. A newly
issued IPO will be considered a primary market trade when the shares are first purchased by
investors directly from the underwriting investment bank; after that any shares traded will be
on the secondary market, between investors themselves. In the primary market prices are
often set beforehand, whereas in the secondary market only basic forces like supply and
demand determine the price of the security.
Stock exchanges or stock markets are referred as secondary market where securities are
traded. In India many regional stock exchanges are there but NSE, BSE and OTCEI are the
major which trades the securities nationwide.
3.5. NATIONAL STOCK EXCHANGE OF INDIA LTD.
With the liberalization of the Indian economy, it was found inevitable to lift the Indian stock
market trading system on par with the international standards. On the basis of the
recommendations of high-powered Pherwani Committee, Industrial Development Bank of
India, Industrial Credit and Investment Corporation of India, Industrial Finance Corporation
of India, all Insurance Corporations, selected commercial banks and others incorporated the

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National Stock Exchange in 1992. NSE is the leading stock exchange of the India. It covers
various cities and town across the country and facilitates the modern screen based trading
system to the country’s traders and investors. NSE has brought the unparalleled transparency,
efficiency, integrity and safety in the security market. NSE has proved itself as catalysis in
the reforming of Indian securities market in terms of microstructure, practices and volume of
trading.
Trading at NSE can be classified under two broad categories:
(a) Wholesale debt market and
(b) Capital market.
Wholesale debt market operations are similar to money market operations - institutions and
corporate bodies enter into high value transactions in financial instruments such as
government securities, treasury bills, public sector unit bonds, commercial paper, certificate
of deposit, etc.
There are two kinds of players in NSE:
(a) Trading members and
(b) Participants.
NSE has a market capitalization of more than US$989 billion and 1,635 companies listed as
on July 2013. Though a number of other exchanges exist, NSE and the Bombay Stock
Exchange are the two most significant stock exchanges in India and between them are
responsible for the vast majority of share transactions. NSE's flagship index, the S&P CNX
Nifty, is used extensively by investors in India and around the world to take exposure to the
Indian equities market. The CNX Nifty Index was developed by Ajay Shah and Susan
Thomas. The CNX Nifty currently consists of the 50 major Indian companies.
3.6. BOMBAY STOCK EXCHANGE
For the premier Stock Exchange that pioneered the stock broking activity in India, 135 years
of experience seems to be a proud milestone. A lot has changed since 1875 when 318 persons
became members of what today is called "The Stock Exchange, Mumbai" by paying a
princely amount of Re1. Since then, the country's capital markets have passed through both
good and bad periods. The journey in the 20th century has not been an easy one. Till the
decade of eighties, there was no scale to measure the ups and downs in the Indian stock
market. The Stock Exchange, Mumbai (BSE) in 1986 came out with a stock index that
subsequently became the barometer of the Indian stock market. SENSEX is not only
scientifically designed but also based on globally accepted construction and review

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methodology. First compiled in 1986, SENSEX is a basket of 30 constituent stocks
representing a sample of large, liquid and representative companies. The base year of
SENSEX is 1978-79 and the base value is 100. The index is widely reported in both domestic
and international markets through print as well as electronic media.
The Index was initially calculated based on the "Full Market Capitalization" methodology but
was shifted to the free-float methodology with effect from September 1, 2003. The "Free-
float Market Capitalization" methodology of index construction is regarded as an industry
best practice globally. All major index providers like MSCI, FTSE, STOXX, S&P and Dow
Jones use the Free-float methodology. Due to its wide acceptance amongst the Indian
investors; SENSEX is regarded to be the pulse of the Indian stock market. As the oldest index
in the country, it provides the time series data over a fairly long period of time (From 1979
onwards).
Small wonder, the SENSEX has over the years become one of the most prominent brands in
the country. The growth of equity markets in India has been phenomenal in the decade gone
by. Right from early nineties the stock market witnessed heightened activity in terms of
various bull and bear runs. The SENSEX captured all these events in the most judicial
manner. One can identify the booms and busts of the Indian stock market through SENSEX.
3.7 CORPORATE ACTIONS IN STOCK MARKETS
Any event that brings material change to a company and affects its stakeholders is known as
corporate action. This includes shareholders, both common and preferred, as well as
bondholders. These events are generally approved by the company's board of directors;
shareholders are permitted to vote on some events as well. Stock split, liquidation, IPO,
dividend, merger and acquisition and spinoffs etc. are the example of corporate actions. Few
recent corporate actions in 2014 in financial services sector are as follows:-
Scrip name Ex. Date Purpose Record date
Sam Lease co 29th jan,14 Stock split from Rs.10 to Re.1 30th jan,14
Muthoot Fin 4th Feb, 14 Interim dividend-Rs. 2.00 5th Feb,14
Priti Mercantile 13th mar,14 Bonus 8:10 15th mar,14
Power finance 7th Feb,14 Interim dividend 8.80 10th Feb,14
Golden Goen 18th mar, 14 Right 9:5 19th mar,14
ATLINFRA 14th mar,14 Stock split from Rs.10 to Re.1 18th mar,14
Table no.2: corporate actions

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3.8. BROKING FIRMS IN INDIA
Broking firms are those business entities which deal with stock broking. In India capital
market is growing very rapidly. Growth of capital market leads to increase in the no. of
investors. With the growth of capital market broking houses in India are also growing
considerably. The financial year FY12-13 turned out to be more difficult for the domestic
broking industry than the previous year as the macro-economic environment remained
challenging notwithstanding short periods that hinted at a possible reversal. The continued
global headwinds on account of expectations of the tapering of the Quantitative Easing by the
Federal Reserve, deceleration in the domestic growth indicators and the sharp depreciation of
the local currency, especially after Q1FY13-14, ensured that many investors continued to stay
away from the domestic capital market.
As expected by ICRA in its earlier reports on the Brokerage Sector in FY12-13, the industry
is witnessing signs of consolidation. The market share of the top 100 brokers on the NSE has
increased substantially to ~89% as at August 2013 from 77% as at March 2013 and 73% as at
March 2011. With companies needing to continuously spend on upgrading their technology
framework, the current environment provides opportunity for the larger players to further
consolidate their positions. Further, we believe that the mid-sized brokers are being forced to
cut back and shut businesses in those areas where they do not have scale whereas some of the
smaller brokers face survival issues.
Top 10 broking firm in India are as follows:-
 Kotak Securities Ltd.
 Karvy stock broking Ltd.
 India bulls
 IL&FS investmart Limited.
 Motilal Oswal Securities
 Reliance Money
 India infoline
 Angel broking Ltd.
 Anand Rathi securities Ltd.
 Geojit

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4. COMPANY PROFILE
4.1 INTRODUCTION
Hedge Equities Pvt. Ltd. is one of the leading retail stock broking house which is running
successfully in the country. Hedge offers its customers a wide range of equity related
services including trade execution on BSE, NSE, Derivatives, Depository services, online
trading ,investment advice etc. The firm has an online trading and investment site –
www.hedgeequities.com. The site gives access to superior content and transaction facility to
retail customers across the country. It simplifies process of investing in stocks.
Hedge equities incorporated under the Companies Act 1956 as Hedge Equities Private
Limited on 17th December 2007 with registered office at 1205, Dalamal Tower, Nariman
Point. Later the company is converted into public limited company on 17th February, 2009.
Team Hedge is a balanced mix of more than 15 years’ experience cutting across various
industries with a strong background in the financial markets. Founder & managing director
of HEDGE GROUP is Mr. Alex K Babu, Mr. Bhuvanendran is CEO of HEDGE EQUITIES,
BOBBY J ARAKUNNEL is COO of HEDGE EQUITIES ever since its inception. The Board
members comprises of veterans from six power houses in their respective fields: FedEx
Securities, Baby Marine Exports, Thakker Developers, Smart Financial, S.M.Hegde (CFO
Videocon Industries) and Padmasree Mohanlal.
HEDGE EQUITIES has around 54 branches & 52 franchises which are spread across 4 states
in India (Kerala, Karnataka, Tamil Nadu and Maharashtra) & in Dubai.
4.2. MISSION
To create an ethical and sustainable financial services platform for our customers and partner
them to build business, to provide employees with meaningful work, self-development and
progression, and to achieve a consistent and competitive growth in profit and earnings for our
shareholders and staff.
4.3. VISION
Ever since its inception, Hedge Equities has been a household name among the masses owing
our success to timely Professional financial assistance to our clients. This aptly articulates our
vision of 'Evolving into a financial supermarket which will be a one stop shop for all
financial solutions'.

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4.4. SOCIAL RESPONSIBILITY
Being a Responsible Corporate Citizen, Hedge Equities has initiated a Non Profit movement
Hedge Yuva which focuses on educating the masses about Stock Market. The movement has
also formulated various scholarship programs for young and dynamic youth.
Promise of Hedge
 To Customers: To exist to serve and meet the customer’s needs. Hedge focus is to
create an ethical and sustainable financial services platform that places customer’s
unique needs over above everything else.
 To Employees: Hedge will provide our employees with a meaningful and rewarding
career with emphasis on self-development and career progression.
 To Shareholders: Hedge will spare no efforts to achieve a consistent and competitive
growth in earnings and profitability.
Advantage of hedge
 At Hedge Equities, the needs of the Customers stand before everything else.
 SEBI Registered Portfolio Manager with a dedicated Wealth Management Services
desk that aims to provide objective guidance tailored to meet each customer’s
individual needs.
 Strong Research Team backed with best of breed data mining and analysis.
 Industry leading technology solutions that make portfolio administration simpler and
cost effective.
 A Global Outlook blended with a Local Flavor and backed with a growing network of
over 120 service outlets. 450 qualified employees and over 200 support associates.
 The Trust and Goodwill of over 20,000 satisfied customers.
 Member of BSE, NSE, MCX, MCX-SX, NMCE, NCDEX and Depository Participant
in CDSL
 Rated as the top brand by the investor community of Asianet channel.
 Growing overseas presence with operations in Middle East and an expanding
presence in the European region and North America.

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4.5 BACKBONE OF HEDGE EQUITIES Ltd
Team Hedge is a balanced mix of more than 15 years’ experience cutting across various
industries with a strong background in the financial markets. The board comprises of six
power houses in their respective fields- FedEx Securities, Baby Marine Exports, Thakker
Developers, Smart financial, SM Hedge (CFO, Videocon Industries) and Padmasree Mohan
Lal.
4.5.1. FedEx Securities
Managed by a team of ex-bankers, FedEx is a SEBI registered category I merchant banker.
The company concentrates on non-fund based activities like structuring, tie up of project
financing, financial restructuring, investment banking, corporate and advisory services. The
core management team consists of bankers with rich experience of decades and exposure to
volatile situations in commercial and investment banking. With offices at Nariman point and
Vile Parle East, Mumbai, state of the art infrastructure and qualified manpower to conduct the
business, FedEx Securities envisages phenomenal growth in this sector of clients.
4.5.2. Baby Marine Exports
Baby Marine Group, started its operations in 1977 from Kozhikode and through innovation
and hard work has grown into three units and related industries spanning both the west and
east coast of Indian. Baby Marine Exports, B.M products, and Baby Marine (Eastern) Exports
are efficiently aided by preprocessing units, ice factories and a fleet of insulated and
refrigerated trucks for sea food transportation. Due to constant upgrading of machinery,
statement of the art infrastructural facilities, better links with raw materials suppliers, and an
established network of purchasers have obviously made Baby Marine Group a leading
Exporter of processed marine products to various international markets.
4.5.3. Smart Financial
Smart Financial entered the financial market only in 1992 but over this brief span has covered
a niche for itself by becoming leading financial service provider. The company offers
guidance to investors as to equities, commodities, mutual funds, portfolio management
services and insurance. It offers complete range of financial solutions that encompasses every
sphere of life.

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4.5.3.1. Thakker Group
Starting off as a land developer and builder in 1962, Thacker’s group diversified into
commercial production of agricultural and horticultural products, housing real estate
marketing, plantations etc. They have provided shelter to more than 40000 families by
offering residential plots and premises. A Thakker developer is the flagship company of the
group. It was established as private limited in 1987 and later went on to become the only
public limited company in North Maharashtra engaged in housing, commercial construction
and land development.
4.5.3.2. S. M. Hedge
Mr. S. M. Hedge, a chartered accountant by profession is the Chief Finance Officer of the
Indian Multinational Videocon International and has been at the helm of affairs for the last 20
years.
4.5.3.4. Padmasree Bharat Mohanlal
Mohanlal, the south Indian movie superstar has become a legend, a brand and cultural
ambassador owing to various factors. Versatility and a natural flair for donning complex
characters have won him numerous accolades not to speak of some unforgettable films
contributed by him. A multifaceted personality, he has some business ventures also which
include Vismaya Max Film Post production studio, college for dubbing artists at the Kinfra
fill and video park, Trivandrum. He is also the director of Uni Royal Marine Exports; a
Kozhikode based major Seafood Export Company .Intellectual and knowledge arbitrage is
the face of modern day business. The same holds true for the financial markets. With the
breathy and depth of knowledge of modern day business that the board of hedge brings to the
table, you can be rest assured that some of the business minds in the business are taking care
of your investments.
4.6. MANAGEMENT TEAM
4.6.1. Alex. K. Babu, Managing Director: Alex Babu is the Founder and Managing
Director of Hedge Equities. He has over 9 years of experience in equity research and fund
management with considerable experience across all market capitalizations. He is a specialist
in mid-cap and infra stock selection. Ever since joining the Hedge Family, he has been
designing, developing and implementing the strategic plan for the company in the most cost
effective and time efficient manner. He was also instrumental in establishing and assembling

26. 26
a strong research team with equal emphasis on macroeconomic, industrial, and company level
research. Prior to joining Hedge Equities, Alex was at the helm of Baby Marine Exports, a
leading Seafood exports firm handling all aspects of finance and marketing. Alex Babu is a
graduate in Engineering from Cochin University of Science and Technology.
4.6.2. N. Bhuvanendran, Chief Executive Officer: Professionalism augmented by
profound vision” is a perfect phrase to describe Bhuvanendran. His rich experience spanning
20 years with the leading names in the Indian financial services industry, is often
camouflaged by his youthful appearance, till Mr. Bhuvanendran opens up his favorite
subject-Money matters. Bhuvanendran is a talented and introspective writer whose creativity
has been capitalized by various financial journals. He is also in the limelight for a market
related show which aims at quenching the financial queries of professionals and investors in a
leading Malayalam television channel. He is one of the few investments professional who
have experience across both listed and unlisted equity space. He is an epitome of the fact that
honesty, transparency and moral integrity are not at variance with Business acumen.
4.6.3. Bobby J Arakunnel, Chief Operating Officer: Mr. Bobby has been responsible for
the entire operations of Hedge Equities ever since its inception. He has proved his versatility
by how casing excellent Man-Management and Marketing Activities and is well versed in all
aspects of Indian Financial Markets. In the last 12 years, he has worked with all the major
players in the financial service sector of the country which has added oodles to his
workmanship.
4.6.4. Mr. Mohanlal, Director: This Honorary Lieutenant Colonel's brand image and
brimming popularity has helped Hedge Equities to create awareness amongst small investors
in retail segment to invest in stocks. Versatility and a natural flair for donning complex
characters have won him numerous accolades not to speak of some unforgettable films
contributed by him. A Multifaceted personality, whose inspiring attitude, has helped him to
take up Business world with a storm.
4.6.5. Dr. Samuel George, Director: He is a doctor and an entrepreneur and runs the
successful and well reputed "City Clinic" in Abu Dhabi since the 1970's. Having completed
his Bachelors in Medicine from the Calcutta Medical College, Dr. George commenced his
career in government service and then subsequently moved to Abu Dhabi in the 1970’s.
Today, their clinic offers specialized services in General Medicine and Pediatrics. Dr. George
also nurtures a dream and a vision to make quality healthcare affordable and accessible to all

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and to this end, he is pursuing the development of a multispecialty hospital at Changanassery
in Kerala to serve the growing health care needs of the state.
4.6.6. Mr. Pradeep Kumar C, Director: Director A leading Textile exporter of Kerala
whose 20 years of experience in this field has made him a veteran we all look up to. His
vision, augmented by his hard work and commitment has helped him to be a strong player in
the field of Exporting. Starting from a root level, he has travelled the hard way to reach this
phenomenal position in Garment Industry which has supplemented him to expand his domain
to foreign locations as well.
4.7 Organizational structure
Figure no: 1: organization structure

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4.8. SERVICES OFFERED
4.8.1. Online trading: Hedge Equities has a large network of branches with online terminals
of NSE and BSE in the Capital market and Derivative segments. The clients are assured of
prompt order execution through dedicated phones and expert dealers at our offices.
4.8.2. Internet Trading: Hedge Equities offers Internet trading through this site. You can
trade through the internet from the comforts of your office or home, anywhere in the world.
The dedicated IT systems ensure service up time and speed, making Internet broking through
Hedge Equities hassle-free. Using the 'easiest' facility provided by NDSL, our clients can
transfer the shares sold by them online without delivery instruction slips. Additionally,
digitally signed contract notes can be sent to clients through E-mail.
4.8.3. Depository services: Hedge Equities is a member of the National Securities
Depository Limited (NSDL), offer depository services with minimum Annual Maintenance
Charges and transaction charges. Account holders can view their holding position through the
Internet. We also offer the “easiest” facility provided by NDSL (electronic access to
securities information and execution of secured transaction) through which clients are given
delivery instructions via internet.
4.8.4. Derivative trading: Hedge offers trading in the futures and options segment of the
National Stock Exchange (NSE). Through the present derivative trading an investor can take
a short-term view on the market for up to a three months‟ perspective by paying a small
margin on the futures segment and a small premium in the options segment. In the case of
options, if the trade goes in the opposite direction the maximum loss will be limited to the
premium paid.
4.8.5. Knowledge Centre: Knowledge Centre activities are intended to provide systematic
and structured services mainly to new investors and also to young aspirant aiming for a career
in financial markets. The centre has three functional areas: the publication Division, the
Training centre, and wealth management advisory service which provides complete
investment solutions to investors through knowledge based personalized service.
4.8.6. Equity Research: Hedge Equities constantly strive to deliver insightful research to
enable pro-active investment decisions. The Research Department is broadly divided into two
divisions - Fundamental Analysis Group (FAG) and Technical Analysis Group (TAG). The
fundamental analysts are continuously scanning the entire economy for discovering what they

29. 29
call the “hidden gems” in stock market terminology and present it to our clients for profitable
investments. Technical Analysis Group has predicts the market movements well in advance
using complex Analytical methods including Elliot Wave Theory. We are equipped with
cutting-edge technologies for technical charting which assist our technical analysts to predict
both upside and downside movements.
4.8.7. Portfolio Management Services: Hedge Equities is a SEBI-approved portfolio
manager offering discretionary and nondiscretionary schemes to its clients. Hedge Equities‟
portfolio management team keeps track of the markets on a daily basis and is exposed to a lot
of information and analytic tools which an investor would not normally have access to. Other
technicalities pertaining to shares like dividends, rights, bonus, buy-back, Mergers and
Acquisitions are also taken care of by us. Maximize your returns by opting for our PMS
scheme.
4.8.8. Commodity Trading: You can trade in commodity futures like gold, silver, crude oil,
rubber etc. and take advantage of the extended trading hours (10 am to 11 pm) in
commodities trading.
4.8.9. Mutual Funds, Bonds etc.: We also offer Mutual Funds and Bonds. You can select
from a wide range of Mutual Funds and Bonds available in the markets today.
4.8.10. Currency Trading: Currency derivatives can be described as contracts between the
sellers and buyers, whose values are to be derived from the underlying assets, the currency
amounts. These are basically risk management tools in force and money markets used for
hedging risks and act as 29 insurance against unforeseen and unpredictable currency and
interest rate movements. Any individual or corporate expecting to receive or pay certain
amounts in foreign currencies at future date can use these products to opt for a fixed rate - at
which the currencies can be exchanged now itself. An upfront premium is payable for buying
a derivative. Currency Futures will bring in more transparency and efficiency in price
discovery, eliminate counterparty credit risk, provide access to all types of market
participants, offer standardized products and provide transparent trading platform.
4.8.11. Hedge School of Applied Economics: Hedge Equities initiates Hedge School of
Applied Economics with the sole objective of moulding highly qualified investment
professionals in the state. It is in fact a company itself floated by Hedge Equities with the
parent holding cent percent stake. It is a knowledge initiative of hedge Equities. The initiative

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has now developed into a movement imparting financial freedom at individual and
organisational level and thus building a financially strong India. Through the various
activities of Hedge School, they facilitate the students, youths and new investors who wish to
explore career as well as investment opportunities in the sector. It offers a set of structured
courses which enable the incumbents to build a better career in the financial industry and take
informed investment decisions.
Competitors
 Geojit BNP Paribas
 JRG Securities
 Religare
 Karvy Stock Brokers
 Muthoot Securities
 Sharewealth
 Motilal Oswal
 Anandrathi
Table no.3: Competitors of Hedge equities
4.8.11.1. Functional Departments
 Client relation Department
The client relation department assists the client or customer to open an account in Hedge
Equities. This department is also known as the front office. A client has to open two types of
accounts to trade and own securities in the NSE & BSE.
 Finance Department
Thus a department, to organize financial activities may be created under the direct control of
the board of directors. Finance manager will decide the major financial policy methods.
Lower levels can delegate the other routine activities.
 Marketing Department
The major functions of marketing department are:

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a) Business associate development: the company takes up the marketing activities of the
various branches. It ensures an efficient marketing arena at its various branches. The
company encourages better relations in its branches and promotes for the development of
various marketing strategies.
b) Brand promotion: An important function of marketing department is to promote the name
of the company. Hedge equities do it through the different promotional activities. The name
of Hedge equities as a stock broking firm is made known to the outside world.
c) Investment promotion: The main clients of Hedge equities were its investors. Hence the
marketing department tries to capture as many as possible to encourage them to invest.
d) Delivery promotion: Intraday trading is not always profitable and might involve a lot of
risk hence Hedge equities promotes for delivery where the shares are kept to be sold for a
later date after analyzing the profitability factors.
 Systems Department
The systems department is playing a vital role in the day to day operations of the company. It
is through the systems department that the clients can avail the facilities of Internet trading.
Optic fiber cables and high bandwidth connections from the Hedge equities office to the ISP,
a dedicated server and back-up ISDN connections were maintained directly by the systems
department. For the purpose of trading they have made use of two software namely ODIN
(Open Dealers Integrated Network)
 Human resource Department
Human resource is often considered as the back of an organization even in this age of
advanced automation & mechanization. Since virtual organizations are not very much
popular in our part of the world, it is very important to any organization to have a HR
department. The presence of an excellent HR department increases the efficiency of an
organization considerably. Human resource management is defined as asset of practices,
policies and programs designed to maximize both personal and organizational goals.
A) Training & Induction
The selected employees will undergo three days continuous induction. During this period, he
will undergo training with all the department of Hedge equities. There will also be classroom
induction also within three months.
b) Wages and Salary Administration

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The wages and salaries of the employees were fixed and granted by the HR department with
consent of the finance department
c) Performance appraisal
It was human resources department which gives the promotions to all employees, making
transfers and taking disciplinary actions if needed.
D) Grievance Handling
The grievances of the employees were received only through proper channels i.e., through the
particular department heads. The HR department will make as per the rules and regulations of
the company.
 Trading Department
The department deals with the trading related activities of the company. The trading refers to
the buying & selling of shares. This department is the most important part of the
Organization. There are two types of trading. They are:
a) Online Trading
These are the trading terminal of the organization. The each computer of the department is
termed as trading terminal. The each terminal is assigned with NCFM certified dealers, who
is in Charge of each portal will do the trade according to the client request. The terminal is
managed by either NEAT (National Exchange for automated trading) software or ODIN
(Open Dealers Integrated Network) software. The client can also place his through written
request or through the telephone, in this the order will be placed by the dealer.
b) Internet Trading
The internet trading is a facility provides by the company in order to trade the securities from
his convenient place like his office, home etc, the order will be placed by the client itself, and
he can make changes before the trade is done for changing the price, cancellation of the
order.
 Delivery & Depository Department
Delivery refers to the shares that bought on a particular day are not sold on that day itself and
holding of the shares for an appreciation in the value of the security and to trade it on a future
date. Deliver instruction slip: it is a slip the client should fill and gave to the dealer regarding
the purchase of the share. There are two procedures to move the shares namely,

33. 33
a) Power of attorney
This is which the client signs at the time of opening a trading account and depository
participant account. If the client has given the power of attorney, HEDGE EQUITIES (P)
LTD will have the power to transact the clients stocks without pay-in slips.
b) Easiest
It is secured internet enabled service which means ‘Electronic Access to Securities
information and Execution of Secured Transaction’. This is facility where in the clients can
give delivery instructions via internet. Easiest is a facility provided by CDSL.
The activities related with the depository department.
 Depository function
 Dematerialization
 Pledging
 Equity Research Department
The function of the department is to study the details regarding the share or security and to
make predictions regarding the future performance of the company.
The types of approaches done in the department
a) Fundamental analysis b) Technical Analysis

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CCHHAAPPTTEERR 55
DDAATTAA AANNAALLYYSSIISS AANNDD IINNTTEERRPPRREETTAATTIIOONN

35. 35
5. DATA ANALYSIS AND INTERPRETATION
5.1. INTRODUCTION
Analysis of data is a process of inspecting, cleaning, transforming, and modeling data with
the goal of discovering useful information, suggesting conclusions, and supporting decision
making. Data analysis has multiple facets and approaches, encompassing diverse techniques
under a variety of names, in different business, science, and social science domains. The
purpose of the data analysis and interpretation phase is to transform the data collected into
credible evidence about the development of the intervention and its performance.
Quantitative and qualitative methods used for data analysis
The aim of qualitative analysis is a complete, detailed description. No attempt is made to
assign frequencies to the linguistic features which are identified in the data, and rare
phenomena receives (or should receive) the same amount of attention as more frequent
phenomena. Qualitative analysis allows for fine distinctions to be drawn because it is not
necessary to shoehorn the data into a finite number of classifications. In quantitative research
we classify features, count them, and even construct more complex statistical models in an
attempt to explain what is observed. Findings can be generalised to a larger population, and
direct comparisons can be made between two corpora, so long as valid sampling and
significance techniques have been used.
This chapter consists of the following analysis
 Economy analysis
 Banking Industry analysis
 Five banking company analysis
 CAMEL Rating and analysis
 Intrinsic value analysis

36. 36
5.2. ECONOMY ANALYSIS
5.2.1. Global economy
Global Economic Analysis is a macro-level study of all the economies of the world taken as a
whole. Globalization has helped the world economy become more integrated and
homogenized with the free movement of goods and services. Its objective is to unify prices of
commodities and wages worldwide. Diffusion of technical knowledge and information is also
a positive effect of globalization. Global Economic Analysis tends to project a picture of the
economic development experienced by the world in general. Although globalization has
marched on rapidly in recent years, it has not been a bed of roses all the way.
5.2.2. Indian economy
India economy, the third largest economy in the world, in terms of purchasing power, is
going to touch new heights in coming years. As predicted by Goldman Sachs, the Global
Investment Bank, by 2035 India would be the third largest economy of the world just after
US and China. It will grow to 60% of size of the US economy.
5.2.3.Tools for economic analysis
 GDP
 INFLATION
 BALANCE OF PAYMENT
 BALANCE OF TRADE
 FISCAL DEFICIT
 INDIAN GOVERNMENT BUDGET
 MONETARY POLICY
 INTEREST RATE
 UNEMPLOYMENT
 BUDGET IN BRIEF

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5.2.3.1. Gross domestic product
The monetary value of all the finished goods and services produced within a country's
borders in a specific time period, though GDP is usually calculated on an annual basis. It
includes all of private and public consumption, government outlays, investments and exports
less imports that occur within a defined territory.
GDP = C + G + I + NX
where:
"C" is equal to all private consumption, or consumer spending, in a nation's economy
"G" is the sum of government spending
"I" is the sum of all the country's businesses spending on capital
"NX" is the nation's total net exports, calculated as total exports minus total imports. (NX =
Exports - Imports).
India GDP annual growth rate
The Gross Domestic Product (GDP) in India expanded 7.50 percent in the fourth quarter of
2014 over the same quarter of the previous year. GDP Annual Growth Rate in India averaged
5.83 percent from 1951 until 2014, reaching an all-time high of 11.40 percent in the first
quarter of 2010 and a record low of -5.20 percent in the fourth quarter of 1979. GDP Annual
Growth Rate in India is reported by the Ministry of Statistics and Programme Implementation
(MOSPI).
Table no.4: GDP
YEAR PERCENTAGE
2012 4.5
2013 5.0
2014 6.7
2015 7.5

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Figure no.2: GDP
Interpretation
The Gross Domestic Product (GDP) in India expanded 7.5 percentage in the first
quarter of 2015 over the same quarter of the previous year. GDP Annual Growth Rate in
India is reported to by ministry of Statistics And Programmed Implementation. Historically
from 1951 UNTIL 2015, India GDP Annual Growth Rate averaged 5.084 percentage
reaching an all-time high of 10.20 percentages in December of 1988 and a record low -5.20
percentage in December of 1979.
5.2.3.2.Inflation
Inflation is the percentage change in the value of the Wholesale Price Index (WPI) on a year-
on year basis. It effectively measures the change in the prices of a basket of goods and
services in a year. In India, inflation is calculated by taking the WPI as base.
Formula for calculating Inflation=
(WPI in month of current year-WPI in same month of previous year)
-------------------------------------------------------------------------------------- X 100
WPI in same month of previous year
India inflation rate
The inflation rate in India was recorded at 8.59 percent in April of 2014. Inflation Rate in
India is reported by the Ministry of Commerce and industry. Historically, from 1969 until

39. 39
2014, India Inflation Rate averaged 7.73 Percent reaching an all-time high of 34.6% Percent
in September of 1974 and a record low of -11.31 Percent in May of 1976. In India, the
wholesale price index (WPI) is the main measure of inflation. The WPI measures the price of
a representative basket of wholesale goods, In India, wholesale price index is divided into
three groups: Primary Articles (20.1 percent of total weight), Fuel and Power (14.9 percent)
and Manufactured Products (65 percent). Food Articles from the Primary Articles Group
account for14.3 percent of the total weight. The most important components of the
Manufactured Products Group are Chemicals and Chemical products (12 Percent of the total
weight): Basic metals, Alloys and Metal products (10.8 percent): Machinery and Machine
Tools (8.9 percent): Textile (7.3 percent) and Transport. Equipment and Parts (5.2 percent) .
This includes a chart with historical data for India Inflation Rate
Figure no.3:Inflation
Interpretation
The inflation rate in India was recorded at 8.28 percent in May of 2014. Inflation Rate in
India averaged 9.62 Percent from 2012 until 2014, reaching an all-time high of 11.16 Percent
in November of 2013 and a record low of 7.55 Percent in January of 2012. Indian annual
consumer prices decelerated to 8.28 percent in May of 2014 from 8.59 percent in April. It is
the lowest rate in three months as food prices slowed slightly. Provisional estimates showed
food cost rose at a slower 9.4 percent year-on-year in May, down from 9.66 percent in the
previous month. Prices of fruit accelerated to 23.17 percent (21.73 percent in April) while
cost of vegetables slowed to 15.27 percent (from 17.5 percent). Meanwhile, prices of fuel and

40. 40
light decelerated to an annual 5.07 percent (5.96 percent in April) and clothing and footwear
cost was marginally higher at 8.86 percent (8.83 percent in the previous period). The
corresponding provisional inflation rates for rural and urban areas for May of 2014 are 8.86
percent and 7.55 percent.
5.2.3.3. Balance of payment
The balance of payments (BOP) is the method countries use to monitor all international
monetary transactions at a specific period of time. Usually, the BOP is calculated every
quarter and every calendar year. All trades conducted by both the private and public
sectors are accounted for in the BOP in order to determine how much money is going in and
out of a country. If a country has received money, this is known as a credit, and, if a country
has paid or given money, the transaction is counted as a debit. Theoretically, the BOP
should be zero, meaning that assets (credits) and liabilities (debits) should balance. But in
practice this is rarely the case and, thus, the BOP can tell the observer if a country has a
deficit or a surplus and from which part of the economy the discrepancies are stemming.
The BOP is divided into three main categories: the current account, the capital account and
the financial account. Within these three categories are sub-divisions, each of which
accounts for a different type of international monetary transaction.
In this study annual data is used from 1970-71 to 2011-12. The all data have been collected
from HAND BOOK OF INDIA (RBI).
Graph 1: Trend of India’s Balance of Payments during the Pre-Devaluation Period.
Graph 2: Trend of India’s Balance of Payments during the Post-Devaluation Period.

41. 41
Figure no.4: Balance of Payment
Interpretation
In 1970’s the position of balance of payment is satisfactory, In 1980’s the balance of
payment is adversely affected due to trade deficits. It can be observe from the above graph
that balance of payment decline sharply in 1990-91 due to domestic political developments
affected confidence abroad in Indian economy.
The analysis of balance of payments pattern indicates that on an average there was significant
increase during the period. It accounted from US dollar 2599 million in 1991-92 to US dollar
-12832 million in 2011-2012. There was a deficit in this account in 1992-93, 1995-96, 2008-
09 and 2011-2012. Balance of payment decline sharply in 2008-2009 due to recession foreign
institution withdrawal their resources.
5.2.3.4. Balance of trade
India recorded a trade deficit of 10990 USD Million in April of 2015. Balance of Trade in
India averaged -1985.93 USD Million from 1957 until 2015, reaching an all-time high of
258.90 USD Million in March of 1977 and a record low of -20210.90 USD Million in
October of 2012. Balance of Trade in India is reported by the Ministry of Commerce and
Industry, India.

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Figure no.5: Balance of Trade
5.2.3.5. Fiscal deficit
Fiscal deficit is the difference between the government's expenditures and its
revenues (excluding the money it's borrowed). A country's fiscal deficit is usually
communicated as a percentage of its gross domestic product (GDP).
Government spending, inflation and lower revenue are among some of the main
factors that point to fiscal deficit. The cynical nature of fiscal deficit does not only jeopardize
the growth of the country but also the government’s economic management abilities.
In an ideal financial system, which has a balanced fiscal deficit, the cost of expenditure is
low while production and growth is advancing. But when there is an increase in fiscal deficit
it means that the government is spending too much while it is earning less. Hence, it is
important that the government keeps its expenses under control. One way the government
earns money, is through taxes. For example, if the government lowered taxes or provided tax
concessions to a particular group of people, then it would earn less, leading to an increase in
fiscal deficit. And that’s one of the reasons why you will find the government giving a face-
lift to the tax structures. In the same context, cutting of custom duty and excise duty will lead
to declining revenues.
Like India, many developing countries are making an effort to resolve big fiscal deficits. On
the bright side, for India, among other sources of revenue, foreign investments and inflow of
remittance s from Indians living overseas has helped avoid very high deficits.
FISICAL DEFICIT AS THE % OF GDP

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Figure no: 6.Fiscal deficit
Interpretation
In 1990 -1991 fiscal deficit risen, it leading to BOP crises in 1991. after that period economic
reforms helps to reduce the fiscal deficit in the period 1996. A sharp increase in the
government salaries and pension in 2002, leads to increase the fiscal deficit. When the govt
introduced the fiscal responsibility and budget management to control the fiscal deficit, this
target were to be achieved in the year 2008. Fiscal deficit gradually decreases from 2011 to
2013, due to the implementation of goods and services tax .
5.2.3.6.India government budget
India recorded a Government Budget deficit equal to 4.50 percent of the country's Gross
Domestic Product in the fiscal year 2013/2014. Government Budget in India averaged -3.87
Percent of GDP from 1991 until 2014, reaching an all-time high of -2.04 Percent of GDP in
1997 and a record low of -7.80 Percent of GDP in 2009. Government Budget in India is
reported by the Ministry of Finance, Government of India.

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Figure no.7:Indian government budget
Interpretation
Government Budget is an itemized accounting of the payments received by government
(taxes and other fees) and the payments made by government (purchases and transfer
payments). A budget deficit occurs when an government spends more money than it
takes in. The opposite of a budget deficit is a budget surplus. This page provides - India
Government Budget - actual values, historical data, forecast, chart, statistics, economic
calendar and news. Content for - India Government Budget.
5.2.3.7. Unemployment
In India, the unemployment rate measures the number of people actively looking for a job as
a percentage of the labour force. The Government of India has taken several steps to decrease
the unemployment rates like launching the Mahatma Gandhi National Rural Employment
Guarantee Scheme which guarantees a 100 day employment to an unemployed person in a
year. It has implemented it in 200 of the districts and further will be expanded to 600
districts. In exchange for working under this scheme the person is paid 150 per day.

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Figure no.8.Unemployment rate
5.2.3.8. Monetary policy
 CRR AND SLR
Cash reserve Ratio is a certain percentage of bank deposits which banks are required
to keep with RBI in the form of reserves or balances .Higher the CRR with the CRR with the
RBI lower will be the liquidity in the system and vice-versa .RBI is empowered to vary CRR
between 15 percent and 3 percent. But as per the suggestion by the Narasimham committee
Report the CRR was reduced from 15% in the 1990 to 5 percent in 2002. As of January 2013,
the CRR is 4.00 percent.
Every financial institution has to maintain a certain quantity of liquid assets with
themselves at any point of time of their total time and demand liabilities. These assets can be
cash, precious metals , approved securities like bonds etc. The ratio of the liquid assets to
time and demand liabilities is termed as the statutory liquidity ratio. There was a reduction of
SLR from 38.5% to 25% because of the suggestions by Narasimham Committee. The current
SLR is 23%.

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Figure no.9.1:CRR and SLR ratio
 REPO Rate and REVERSE REPO
Repo rate is the rate at which RBI lends to commercial banks generally
against Government securities. Reduction in Repo rate helps the commercial banks to get
money at a cheaper rate and increase in Repo rate discourages the commercial banks to get
money as the rate increases and becomes expensive. Reverse Repo rate is the rate at which
RBl borrows money from the commercial banks
Figure no.9.2: Repo rate and Reverse Repo rate

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5.2.3.9.2014-2015budget brief
 Recovery seen with the growth rate of world economy projected at 3.6 per cent in 2014
vis-à-vis in 2013.
 Decline in fiscal deficit from 5.7% in 2011-12 to 4.5% in 2013-14 mainly achieved by
reduction in expenditure rather than bywayof realization of higher revenue.
 Improvement in current account deficit from 4.7 % in 2012-13to year end level of 1.7%
mainly achieved through restriction on non-essential import and slow-down in overall
aggregate demand. Needto keep watch on CAD.
 Inflation has remain atelevated level with gradual moderation inWPIrecently.
 The composite cap of foreign investment to be raised to 49 per cent with full Indian
management and control through the FIPB route.
5.2.3.10. Interest rate
In India, interest rate decisions are taken by the Reserve Bank of India's Central Board of
Directors. The official interest rate is the benchmark repurchase rate. In 2014, the primary
objective of the RBI monetary policy became price stability, giving less importance to
government's borrowing, the stability of the rupee exchange rate and the need to protect
exports. In February 2015, the government and the central bank agreed to set a consumer
inflation target of 4 percent, with a band of plus or minus 2 percentage points, from the
financial year ending in March 2017.
Figure no.10: Interest rate

48. 48
Interpretation
The benchmark interest rate in India was last recorded at 7.50 percent. Interest Rate in India
averaged 6.69 percent from 2000 until 2015, reaching an all-time high of 14.50 percent in
August of 2000 and a record low of 4.25 percent in April of 2009. Interest Rate in India is
reported by the Reserve Bank of India
The benchmark interest rate in India was last recorded at 7.50 percent. Interest Rate in India
averaged 6.69 percent from 2000 until 2015, reaching an all-time high of 14.50 percent in
August of 2000 and a record low of 4.25 percent in April of 2009. Interest Rate in India is
reported by the Reserve Bank of India.
5.2.3.11. Budget in banking
 Time bound programme as Financial Inclusion Mission to be launched on 15 August
this year with focus on the weaker sections of the society.
 Banks to be encouraged to extend long term loans to infrastructure sector with
flexible structuring.
 Banks to be permitted to raise long term funds for lending to infrastructure sector with
minimum regulatory pre-emption such as CRR, SLR and Priority Sector Lending
(PSL).

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5.3. INDUSTRY ANALYSIS- ANALYSIS OF INDIAN BANKING INDUSTRY
India is considered among the top economies in the world, with tremendous potential for its
banking sector to flourish. The last decade witnessed a significant upsurge in transactions
through ATMs, as well as internet and mobile banking.
The country's banking industry looks set for greater transformation. With the Indian
Parliament passing the Banking Laws (Amendment) Bill in 2012, the landscape of the sector
has duly changed. The bill allows the Reserve Bank of India (RBI) to make final guidelines
on issuing new licenses, which could lead to a greater number of banks in the country. The
style of operation is also slowly evolving with the integration of modern technology into the
banking industry.
In the next 5-10 years, the sector is expected to create up to two million new jobs driven by
the efforts of the RBI and the Government of India to expand financial services into rural
areas. Two new banks have already received licenses from the government, and the RBI's
new norms will offer incentives to banks to spot bad loans and take necessary recourse to
curb the practices of rogue borrowers
5.3.1. SWOT Analysis
In SWOT analysis, we discuss the Strengths, Weaknesses, Opportunities and Threats
pertaining to the Indian banking industry.
STRENGTHS
Valuable contributor to GDP
Regulatory environment
Government backing
Rural banking expertise
Diversified banking activities
WEAKNESSES
Increasing NPA
Low penetration
Lack of product differentiation
OPPORTUNITIES
Technological advance
Untapped rural market
Favourable Government rural schemes
THREATS
Unorganized money lending market
Bad quality service
Rise of monopolistic structures
Table no.5:SWOT analysis
Strengths:
In India, bank lending has been a significant driver of GDP growth and employment. The
RBI has been doing an appreciable role in regulating the banking environment in the country,

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and Indian banks are considered too-strictly-monitored-to-fail. Indian banks are considered to
have strong and transparent balance sheets relative to other bank in comparable economies.
The vast banking network and growing number of branches and ATM has brought even the
remote corners of the country to the benefits of banking. Diversified banking activities under
3 subsidiaries i.e. Indbank Merchant Banking Services Ltd, Indbank Housing Ltd, IndFund
Management Ltd.
Weaknesses:
The increasing share of Non-Performing Assets is a cause of concern. Though banks have
reached the nooks and corners of the country, it has failed to bring in vast majority people
into the system. There is a certain sense of complacency which is reflected by the lack of
product differentiation and quality service. Public sector banks need to strengthen their
employee skill levels and competitiveness especially in sales and marketing, service
operations, risk management and overall organizational efficiency. Also, the regulatory
framework is not effective beyond Scheduled Commercial Banks.
Opportunities:
The scope and economy of bringing in advanced technologies to banking operations is high
in India, owing to the huge customer base and cheap availability of IT/ITeS. Also, there is a
huge rural market which remains untapped even after the penetration of banking
infrastructure to most of the rural areas of India.
Threats:
Even after the penetration of banking infrastructure to many remote areas of the country,
much of the rural population still depend heavily on unauthorized money lenders for their
financial needs. This is a serious concern for the country as a whole as well as the banking
industry. The industry is still dominated by public sector banks, thus creating monopolistic
structures. This can impede competitiveness and efficiency, if not met with the right policies.
Also, the relative complacency of public sector banks with respect to sales and marketing and
service operations should also be looked upon.

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5.3.2. PORTER’s Five Forces Model
Figure no.11:Porters five forces model
Banking is a client-oriented business, which demands high-quality service and extreme trust.
With the onset of financial inclusion initiatives and technological advancements in the
banking scenario, the industry is facing immense challenges from everywhere - competitors,
clients, RBI and other financial intermediaries. Here, we discuss the Porter’s Five Forces
Model to assess the competitive environment in the industry.
a) Buyer Power – The clients are the buyers. The high bargaining power of clients forces the
banks to render uniform services. Nowadays, almost all banks provide electronic facilities
like ATM, Internet banking, Mobile banking etc. to the clients.
b) Supplier Power- On account of the stringent RBI regulatory benchmarks, the bargaining
power of the supplier is low. The banks are obliged to meet the numerous regulatory
standards created by the RBI.
c) Availability of Substitutes- The banks are facing tight competition from substitutes like
NBFCs, mutual funds, government securities and T-bills. Recently, liquid funds have become
a close substitute for savings account. Hence, availability of substitutes is High.
d) Threat of new entrants- In the current scenario, there is a significant threat of new entrants
owing to the RBI rolling out new banking licenses. The RBI has already awarded banking
licenses to two corporations- IDFC and Bandhan Financial. Even then, the threat of new
entrants is generally low on account of the high banking regulations set by the RBI. It is
essential to get approval from the RBI before setting up a bank.
Competitive
rivalry
(High)
BuyerPower
(High)
Threat of new
entrants
(Low)
Supplier
Power
(High)
Availabilityof
substitutes
(High)

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e) Competitive Rivalry – There is a high competition among the existing banks as number of
prominent public, private, cooperative and foreign banks are competing rigorously for
establishing their own space in the industry.
5.3.3. Market size
The size of banking assets in India totaled US$ 1.8 trillion in FY 13 and is expected to touch
US$ 28.5 trillion in FY 25.Bank deposits have grown at a compound annual growth rate
(CAGR) of 21.2 per cent over FY 06-13. In FY 13, total deposits were US$ 1,274.3 billion.
The revenue of Indian banks increased from US$ 11.8 billion to US$ 46.9 billion over the
period 2001-2010. Profit after tax also reached US$ 12 billion from US$ 1.4 billion in the
period. Credit to housing sector grew at a CAGR of 11.1 per cent during the period FY 08-13.
Total banking sector credit is anticipated to grow at a CAGR of 18.1 per cent (in terms of
INR) to reach US$ 2.4 trillion by 2017.
5.3.4. Government Initiatives
The RBI has announced a few measures in its bi-monthly monetary policy on June 3, 2014
which includes an increase in the foreign exchange remittance limit to US$ 125,000 from the
previous limit of US$ 75,000.
State Bank of India (SBI) has announced a one-year rural fellowship programme 'SBI Youth
for India (SBI YFI)' for 2014 to draft the country's youth to become change agents in the
country's rural regions. The programme is for young professionals who are keen to leadthe
change for a better India.
The RBI has simplified the rules for credit to exporters. Exporters can now receive long-term
advance credit from banks for up to 10 years to service their contracts. Exporters have to
have a satisfactory record of three years to receive payments from banks, who can adjust the
payments against future exports.
The RBI has enabled overseas investors, including foreign portfolio investors (FPIs) and non-
resident Indians (NRIs), to invest up to 26 per cent in insurance and related activities through
the automatic route.

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5.3.5. Reforming the Banking Sector
As election season comes to a close, Prime Minister Narendra Modi must now join Dr. Rajan
in reviving the stagnant Indian economy and reforming the country’s banking system. The
RBI is aiming to reform and strengthen the Indian banking system through fostering
increased competition in both the private and public sectors, especially in making public
sector banks more competitive.
Public sector banks appear to have more internal structural problems, as evidenced by Dr.
Rajan’s assertion that the government is attempting to take its hands out of managing public
sector banks. The RBI plans to do this by letting more private actors hold public sector
banks’ shares, increase the length of tenure for CEOs at public sector banks, separate the
position of the Chairman and the CEO and give more power to independent banking and
finance professionals. However, there are some inevitable obstacles to this proposal. Making
these structural changes to government-owned banks requires the RBI to win the approval of
parliament and, perhaps more importantly, government officials who currently have control
over public sector banks and may not welcome these changes

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5.4. COMPANY ANALYSIS
5.4.1. HDFC Bank
HDFC Bank Limited is an Indian banking and financial services company based in Mumbai,
Maharashtra. It was incorporated in 1994. HDFC Bank is the fifth largest bank in India by
assets. It is the largest bank in India by market capitalization as of 24 February 2014. As on
Jan 2 2014, the market cap value of HDFC was around USD 26.88B, as compared to Credit
Suisse Group with USD 47.63B. The bank was promoted by the Housing Development
Finance Corporation, a premier housing finance company (set up in 1977) of India.
As of 31 March 2013, the bank had assets of INR 4.08 trillion. For the fiscal year
2012-13, the bank has reported net profit of INR 69 billion, up 31% from the previous fiscal
year. Its customer base stood at 28.7 million customers on 31 March 2013.
5.4.1.1.Products and Services
 Products
Personal banking
Under Personal Banking, HDFC offers:
 Accounts & Deposits
 Loans
 Cards
 Demat
 Investments
 Insurance
 Forex
 Premium Banking
 Private Banking
NRI banking
Under NRI Banking, HDFC offers:
 Accounts & Deposits
 Money Transfer

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 Investments & Insurance
 Research Reports
 Payment Services
SME banking
Under SME Banking, HDFC offers:
 Accounts & Deposits
 Business Financing
 Trade Services
 Payments & Collections
 Cards
Wholesale banking
HDFC offers Wholesale Banking for Corporate and Financial Institutions & Trusts. The
Bank also provides services such as Investment Banking and other services in the
Government sector.
 Service
Wholesale banking services
HDFC Bank provides a range of commercial and transactional banking services, including
working capital finance, trade services, transactional services, cash management, etc. to large,
small and mid-sized corporates and agriculture-based businesses in India. The bank is also a
leading provider of these services to its corporate customers, mutual funds, stock exchange
members and banks.
Retail banking services
HDFC Bank was the first bank in India to launch an International Debit Card in association
with VISA (Visa Electron). The bank also issues the MasterCard Maestro debit card. The
Bank launched its credit card business in late 2001. By the end of June 2013, it had a credit
card base of 5.94 million. By March 2012, the bank had a total card base (debit and credit
cards) of over 19.7 million. The Bank is also one of the leading players in the "merchant
acquiring" business with over 240,000 point-of-sale (POS) terminals for debit / credit cards
acceptance at merchant establishments. The Bank is positioned in various net based B2C

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opportunities including a wide range of Internet banking services for Fixed Deposits, Loans,
Bill Payments, etc.
Treasury
The bank has three main product areas - Foreign Exchange and Derivatives, Local Currency
Money Market & Debt Securities, and Equities. These services are provided through the
bank's Treasury team. To comply with statutory reserve requirements, the bank is required to
hold 25% of its deposits in government securities. The Treasury business is responsible for
managing the returns and market risk on this investment portfolio.
5.4.1.2.Operations
As of 30 September 2013, HDFC Bank has 3,251 branches and 11,177 ATMs, in 2,022 cities
in India, and all branches of the bank are linked on an online real-time basis. The Bank has
overseas branch operations in Bahrain and Hong Kong.
HDFC Bank has two subsidiaries:
HDB Financial Services Limited (‘HDBFS’): HDBFS is engaged in retail asset financing. It
is a non-deposit taking non-bank finance company (NBFC). Apart from lending to
individuals, the company grants loans to micro, small and medium business enterprises. It
also runs call centers for collection services to the HDFC Bank’s retail loan products. HDFC
Bank holds 97.4% shares in HDBFS. As of March 31, 2013, HDBFS has 230 branches in 184
cities. During the FY 2012-13, HDBFS had turnover of INR 9.6 billion and profit after tax of
INR 1 billion.[2] It has 6,404 employees as of 31 March 2013.
HDFC Securities Limited (‘HSL’): HSL is engaged in stock broking. As of March 31, 2013,
HDBFS has 194 branches across 150 cities. HDFC Bank has 62.1% shareholding in HSL.
During the FY 2012-13, HSL had turnover of INR 2.3 billion and profit after tax of INR 668
million. During the year, the Company received the “Best e-Brokerage Award - 2012” in the
Outlook Money Awards in the runner up category
. 5.4.1.3. Management of HDFC
Mr. C.M. Vasudev has been appointed as the Chairman of the Bank with effect from 6th July
2010. Mr. Vasudev has been a Director of the Bank since October 2006. A retired IAS
officer, Mr. Vasudev has had an illustrious career in the civil services and has held several

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key positions in India and overseas, including Finance Secretary, Government of India,
Executive Director, World Bank and Government nominee on the Boards of many companies
in the financial sector.
The Managing Director, Mr. Aditya Puri, has been a professional banker for over 25 years
and before joining HDFC Bank in 1994 was heading Citibank's operations in Malaysia.
The Bank's Board of Directors is composed of eminent individuals with a wealth of
experience in public policy, administration, industry and commercial banking. Senior
executives representing HDFC are also on the Board. Senior banking professionals with
substantial experience in India and abroad head various businesses and functions and report
to the Managing Director. Given the professional expertise of the management team and the
overall focus on recruiting and retaining the best talent in the industry, the bank believes that
its people are a significant competitive strength.
5.4.1.4. Shareholding pattern of HDFC
Description Percent of Share (%)
Promoter Group (HDFC) 22.72
Foreign Institutional Investors (FII) 33.61
Individual shareholders 8.43
Bodies Corporate 8.01
Insurance companies 5.38
Mutual Funds/UTI 4.34
NRI/OCB/Others .40
Financial Institutions/Banks .09
ADS/GDRs 17.02
Table no.6:shareholding pattern of HDFC bank

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Figure no.12: Percent of Shares of HDFC bank
5.4.2. Federal Bank
Federal Bank Limited is a major Indian commercial bank in the private sector,
headquartered at Aluva, Kochi, Kerala. It is the fourth largest bank in India in terms of capital
base. As of 30 June 2014, Federal Bank has 1203 branches spread across 24 states and
1392 ATMs across the country. Its balance-sheet stood at Rs 1.03 trillion as of end March
2014 and its net profit stood at Rs 839 crore for the full fiscal year.
5.4.2.1.Sponsorship
Federal Bank Limited is a major Indian commercial bank in the private sector,
headquartered at Aluva, Kochi, and Kerala. It is the fourth largest bank in India in terms of
capital base. As of 30 June 2014, Federal Bank has 1203 branches spread across 24 states and
1392 ATMs across the country. Its balance-sheet stood at Rs 1.03 trillion as of end March
2014 and its net profit stood at Rs 839 crore for the full fiscal year.
5.4.2.2.Missionand vision
 Be a "customer-centric" organisation setting standards for customer experience.
Promoter Group (HDFC)
Foreign Institutional Investors
(FII)
Individual shareholders
Bodies Corporate
Insurance companies
Mutual Funds/UTI
NRI/OCB/Others
Financial Institutions/Banks

59. 59
 Be the ‘trusted' partner of choice for target (SME, Retail, NRI) customers.
 Become the numero uno bank in Kerala and a leading player in our
5.4.2.3.Corporate social responsibility
Our Founder's values and ethos based on trust got embedded in the bank's policies and
principles which reflect on its day to day business. CSR in Federal Bank began with the first
act of cultivating banking habits in an agrarian society - to effectively utilize idle money for
productive purposes.Creating employment opportunity for a predominantly farming
community was phase two. The Bank is a commercial entity. It has to carry out its operations
to generate profits to fulfill its responsibility to all stakeholders. But its activities are carried
out in the society and it owes to the society for its business prosperity.
While carrying out its activities, Bank is duty bound to ensure that its products and
services serve the best interests of the society. Bank has approved a policy for Sustainable
Development, which ensures that Bank's activities are conducive to sustainable social
welfare. In addition to this, Bank has to directly participate in social activities to help the
development of specific areas/segments.
5.4.2.4.Products & Services
Personal Banking – The bank provides a wide range of banking products and services such
as saving accounts, deposits, personal loans, ATM services, telebanking services, RTGS,
insurance, etc.
NRI Banking – The bank offers a wide range of NRI services through all its branches. Non–
Resident Indians (NRI) can open Non–Resident External (NRE), Non– Resident Ordinary
(NRO) accounts in Indian Rupee. You can also have Foreign Currency Non– Resident
(FCNR) accounts in six foreign currencies approved by Reserve Bank of India (US Dollar,
British Pound, Euro, Japanese Yen, Canadian Dollar and Australian Dollar). Returning NRIs
can open Resident Foreign Currency (RFC) account with any of their branches.
SME–Business Banking – The bank offers a parameterized loan and various current account
products tailor–made for each sector under SME. Competitive pricing, relaxation in collateral
security, collateral free loans with CGTMSE cover, customization in various current account

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products, cash management services, internet bill payment facility etc are some of the
features of their products which makes them a real friend of entrepreneurs.
Corporate Banking – The bank offers customized structured products to meet the
specialized requirements of corporates, institutions and business clients. Each member of
their Corporate Finance team brings with him a wealth of transaction experience across
transaction varieties and sectors to cater to you better. The bank has emerged as one of the
leading private sector banks in the country, in providing a gamut of products for industry,
trade and infrastructure sectors. The bank serves a wide range of customers across varying
industries, segments and regions.
5.2.4.5.Awards & Achievement (2012-2014)
 Federal Bank won the Banking Frontier's Finnoviti 2013 Award for its innovation
Virtual Accounting System (VAS)
 Federal Bank won two IDRBT Awards for Excellence in Banking Technology
 Federal Bank won IBA Innovation Award 2013 for FedBook
 Federal Bank was awarded "The Best Bank among Private Sector Banks"
 Federal Bank was awarded the "Most Socially Committed Organization"
 Federal Bank won ACI Excellence Award 2013 for Apna Gold
 Federal Bank was awarded "The Best Bank among Private Sector Banks"
 Federal Bank won the IDRBT Banking Technology Excellence award for 2013-14 in
four out of total five categories in the mid-sized lenders segment:
 Best Bank Award for Use of Technology for Financial Inclusion Among Mid-Size
Banks
 Best Bank Award for Social Media and Mobile Banking Among Mid-Size Banks
 Best Bank Award for Business Intelligence Initiatives among Mid-Size Banks
 Best Bank Award for Best IT Team among Mid-Size Banks

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5.2.4.6. Management - Federal Bank
Name Designation
Abraham Koshy Chairman
Abraham Chacko Executive Director
Dilip Gena Sadarangani Director
K M Chandrasekhar Director
Grace Elizabeth Koshie Director
Shyam Srinivasan Managing Director & CEO
Nilesh Shivji Vikamsey Director
Sudhir Moreshwar Joshi Director
Harish Hansubhai Engineer Director
Shubhalakshmi Panse Addnl.Independent Director
Table no.7:management of Federal bank
5.2.4.7. shareholding pattern of Federal bank
Description Percent of Share (%)
Promoters group 0.00
Individual shareholders 16.43
Financial Institutions 20.83
FII 42.25
Govt. 0.00
Others 20.49
Table no.8:shareholding pattern of Federal bank
Figure no.13: Percent of shares of Federal Bank
Percent of Share (%)
Promoters
Individual
Institution
FII
Govt.
Others

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5.4.3. YES Bank
YES BANK, India's fourth largest private sector Bank is an outcome of the professional
entrepreneurship of its Founder, Rana Kapoor and his highly competent top management
team, to establish a high quality, customer centric, service driven, private Indian Bank
catering to the “Future Businesses of India”. YES BANK is the only Greenfield license
awarded by the RBI in the last 17 years, associated with the finest pedigree investors.
Since its inception in 2004, YES BANK has fructified into a ‘“Full Service Commercial
Bank” that has steadily built Corporate and Institutional Banking, Financial Markets,
Investment Banking, Corporate Finance, Branch Banking, Business and Transaction
Banking, and Wealth Management business lines across the country, and is well equipped to
offer a range of products and services to corporate and retail customers. YES BANK has
adopted international best practices, the highest standards of service quality and operational
excellence, and offers comprehensive banking and financial solutions to all its valued
customers. Today, YES BANK has a widespread branch network of over 560 branches across
375 cities, with 1100+ ATMs and 2 National Operating Centers in Mumbai and Gurgaon.
The sustained growth of YES BANK is based on the key pillars of Growth, Trust,
Technology, Human Capital, and Transparency & Responsible Banking. As
the Professionals’ Bank of India, YES BANK has exemplified ‘creating and sharing value’
for all its stakeholders, and has created a differentiated Banking Paradigm with the vision
of ‘Building the Best Quality Bank of the World in India’ by 2020.
5.4.3.1.Brand Ethos
YES BANK has pursued a differentiated branding strategy in line with its objective of
becoming the Best Quality Bank of the World in India. The foundation of this strategy lies in
the name "YES", which underlines the twin ethos of service and trust and the promise to
deliver a truly delightful and unprecedented Banking experience to all customers
5.4.3.2.Awards & Achievement
Institutional & Business Excellence
 Best Mid-Sized Bank , 2012 - Business Today
 Best Mid-Sized Bank, 2012 - Business World
 Best Private Sector Bank, 2012 - Money Today