Industry analysis n financial services in INDIA

1. Grp.No13
Swatee Ghosh
Samit kr. Kapat
Ronald Fernandes
9/10/2010 1

2. PLACES TO SAVE MONEY
Would you save your money in any of these places?
Why? Why not? Can you think of other places to save
money?
• Bed & Mattress
• Cookie Jar
• Pillow
• Wallet
• Money Belt
• Small House Safe
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3. 9/10/2010 3

4. Financial services refer to services provided by the financial industry.
The industry comprises of organizations who manage money.
FORMAL INFORMAL
FINANCIAL SERVICES FINANCIAL
SERVICES
• Credit cards
• Loans • Payday lenders
• Investment vehicles • Check cashing services
• Direct deposit • Rent-to-own stores
• Wire transfers/ remittances • Pawn shops
• Loans from family/friends
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5. Banks
 A landmark was registered in the Indian banking sector
when the major banks were nationalized in 1969.
 Commercial banks
 Investments banks
 Bonds (debt)
 Stocks (equity)
 Notary services
 Credit cards
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6. Stock market
 Origin  Pre-independence  Post-independence
 India's market cap as a percentage of world market cap was
2.8 per cent as on December 31, 2009.
 In 2009, there were 21 IPOs that raised US$ 4.18 billion as
compared to 36 IPOs in 2008 that raised US$ 3.62 billion.
 QIP is a capital raising tool, whereby a listed company can
issue equity shares, fully and partly convertible debentures,
or securities other than warrants, which are convertible into
equity shares, to a qualified institutional buyer (QIB).
 In 2009, Indian companies had raised close to US$ 7.13
billion (QIP)
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7. NSE
Trading at NSE
 Fully automated screen-based trading mechanism
 Strictly follows the principle of an order-driven market
 Trading members are linked through a communication network
 This network allows them to execute trade from their offices
 The prices at which the buyer and seller are willing to transact will appear
on the screen
 When the prices match the transaction will be completed
 A confirmation slip will be printed at the office of the trading member
Advantage of trading at NSE
 Integrated network for trading in stock market of India
 Fully automated screen based system that provides higher degree of
transparency
 Investors can transact from any part of the country at uniform prices
 Greater functional efficiency supported by totally computerized network
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8. Foreign Exchange
 Currency exchange
 Wire transfer
 Foreign currency banking
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9. Investments services
 Asset management
 Hedge fund management
 Custody management
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10. Insurance
 India 5th largest life insurance market in the emerging
insurance economies globally and the segment is
growing at a healthy 32-34 per cent annually (LIC)
 Total first year premium collected in 2009-10 was US$
24.64 billion, an increase of 25.46 per cent over US$
19.64 billion collected in 2008-09.(IRDA)
 Brokers
 Underwriters
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11. Others
 Private equity
 Angel investor
 Conglomerates
 Debt resolution
 Venture capital -Presently in India there are around 34
national and 2 international SEBI registered venture
capital funds
 Mutual funds
 Mortgage companies
 Investment research agencies
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12. Economic Updates
 Indian economy growth 7.4 per cent in 2009-10.
 (CSO) – financial services 9.7 per cent in 2009-10
 (SEBI) Investors (FIIs) as on May 31, 2010 was 1,710
 FII inflow in equity US$ 4.6 billion
 US$ 5.9 billion inflow in debt. (May)09
 US$ 875.73 million in debt(Aug)10
 Net investment , 2010 was US$ 530.05 million
 Mutual fund US$ 170.46 billion May 2010- US$
135.58 billion May 2009, (AMFI).
 India's foreign exchange reserves US$ 271. billion, an
increase of US$ 9.87 billion (RBI)
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13. Main players of financial services
 SBI Capital Markets Limited:
 Bajaj Capital Limited:
 DSP Merrill Lynch Limited:
 Birla Global Finance Limited:
 Housing Development Finance Corporation:
 PNB Housing Finance Limited:
 ICICI Group:
 LIC Finance Limited:
 L & T Finance Limited:
 Karvy Group:
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14. Consolidation
 Increasing the number of customers and beating
competitors by selling various Financial products through
one distribution channel.
 Diversifying products and customers to avoid the risk and to
finance a loss-making part of the business with the profits of
another one.
 Maintaining a large capital base as a sponge to absorb losses
and the growing cost of technology.

 Increasing the quality of service and products to gain the
trust of the customers.
 Increasing profitability in the battle against competitors
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15. Performance  F.S.
 At about $900 billion, India's stock of financial assets—including
bank deposits, equities, and debt securities—is one-fifth the size
of China's The gap is widening: by 2010, China's financial stock
will reach $9 trillion, while India's will remain below $2 trillion.
 India's financial system is more effective than China's, largely
because the market share of more efficient foreign and privately
owned banks in India has crept up to 25 percent.
 Many nonperforming loans have been cleaned up, and while the
true figure is hard to determine, they are now estimated at
around 9 percent of all lending, compared with up to 40 percent
in China.
 India's stock market is booming, and its best companies list
shares abroad.
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16. Growth  F.S.
 Present is nearly 8.5% per year. The rise in the growth rate suggests the
growth of the economy.
 To maintain such a growth for a long term the inflation has to come
down further.
The financial sector in India had an overall growth of 15%, which has
exhibited stability over the last few years although several other markets
across the Asian region were going through a turmoil.
 With the opening of the financial market variety of products and
services were introduced to suit the need of the customer.
 The Reserve Bank of India (RBI) played a dynamic role in the growth of
the financial sector of India.
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17. Recession Financial services
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18. Recession 2008-09Impact
 First, the Indian stock markets, both BSE as well as
NSE, fell dramatically over 2008 .
 India’s main index sensex plunged nearly 50% during
the year from a high of 19,080 in January 2008 to 8,674
in January 2009.
 FIIs’ net outflows have been Rs 47,706 crore (Rs 477.06
billion) till March 30 in the financial year 2008-09 as
against huge inflows of Rs 53,000 crore (Rs 530 billion)
in the previous fiscal.
 Money and credit markets under pressure.(E.g.M.F.)
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19. Resistance ???
 Supervisory Review Process (SRP)
 Investment Fluctuation Reserve (IFR)-5%
 ‘Held for Trading’ (HFT) & ‘Available for Sale’ (AFS)
 Housing loan Rs.30 lakh (USD 75,000 approx) to
individuals against the mortgage of residential housing
properties from 75% to 50%
STEPS Taken:
 Financial Accounting-Conservative(net loss)
 Setting up of the Clearing Corporation of India Limited (CCIL)
 Setting up of INFINET as the communication backbone for the
financial sector.
 Introduction of Negotiated Dealing System (NDS) for screen-
based trading in government securities.
 Credit Information Bureau of India Limited (CIBIL) for
information sharing on defaulters as also other borrowers
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20. Bibliography
 www.investopedio.com
 www.sebi.com
 www.debtresolutionpartners.com
 www.mca.gov.in
 www.wikipedia.org
 www.centrelink.gov.in
 www.fisglobal.com
 www.business.com
 www.moneymadeclear.com
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21. THANK YOU
Q&A
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