A

SEMINAR REPORT
ON

EQUITIES AND PORTFOLIO MANAGEMENT

BY

SINTU KUMAR

2009-2011
IN PARTIAL FULFILLMENT OF

MASTER OF BUSINESS ADMINISTRATION

DISHA INSTITUTE OF MANAGEMENT AND TECHNOLOGY, RAIPUR (C.G.)

Chhattisgarh Swami Vivekananda Technical University, Bhilai (C.G.)

DISHA INSTITUTE OF MANAGEMENT AND TECHNOLOGY

1
 Satya Vihar, Vidhansabha-Chandrakhuri Marg (Baloda Bazaar Road), Mandir Hasaud, Dist-Raipur (C.G.) Pin-492101
Tel No. : 0771-4200100-09, Fax No. : 0771-4200110, 2472010
Website: www.dimatindia.com, Email: info@dimatindia.com

CERTIFICATE

This is to certify that Mr.SINTU KUMAR of DIMAT, MBA Semester –III has
successfully completed Seminar Report in partial fulfillment of requirement for the award
of MBA Degree prescribed by the Chhattisgarh Swami Vivekanand Technical
University, Bhillai (CG).

This report is the record of authentic work carried out by the student during the academic
year 2009-2011.

Prof. H.BIT DR. S. BENEDICT

(Internal Guide ) Academic Head
(Faculty of Management) (Faculty of Management)

DECLARATION

2
I, SINTU KUMAR hereby, declare that the seminar report titled EQUITIES AND
PORTFOLIO MANAGEMENT is the record of authentic work carried out by me
during the academic year 2010-2011.

Signature of the student

SINTU KUMAR

Date ROLL NO.-5053609180

MBA 3rd semester

Sec - B

ACKNOWLEDGEMENT

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I would like to express my gratitude to all those who gave me the responsibility to
complete this Report. I want to thank the Department of Management of DISHA
INSTITUTE OF MANAGEMENT & TECHNOLOGY RAIPUR for giving me
Permission to commence this report. I have further more to thank my friends without
their help it won’t be possible for me to complete this research report.

I am deeply indebted to my project guide me Dr. H.BIT Faculty of Management whose

help, stimulating suggestions and encouragement helped me in all the time. Our,
Academic Head Dr. SATHISH BENEDICT (Faculty of Management) for his vital
encouragement and support.

Especially, I would like to give my special thanks to my family members whose patient
love enabled me to complete this work

SINTU KUMAR

ROLL NO 5053609180

MBA 3 rd semester

Abstract

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The current study provides a categorized bibliography on the application of the
techniques of multiple criteria decision making (MCDM) to the problems and issues of
portfolio management. A large number of studies in the field of portfolio management
have been compiled and classified according to the different multicriteria methodological
approaches that have been used. Except the in-depth presentation of the MCDM
contributions in the area of portfolio management, the outmost aim of this paper is to
stress the inarguable multiple criterion nature of the majority of the problems that modern
financial management faces.

I        INTRODUCTION 7

INTRODUCTION TO INVESTMENT 8-9

5
 EQUITY SHARES 10
PORTFOLIO 11-14
RISK 15
PHASES OF PORTFOLIO MANAGEMENT 16-17
COMPANY PROFILE
II 18-21
ANALYSIS AND INFERENCE
III 22
MODELS 23-25
BETA 26-28
ICICI BANK 29-30
ANALYSIS FOR 2008 31

SBI BANK 32-34

ANALYSIS FOR 2008 35-36

CONCLUSIONS & SUGGESTIONS
IV 37-38
BIBLIOGRAPHY
V 39-40

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 CHAPTER I
INTRODUCATION

INTRODUCTION TO INVESTMENT
Investment may be defined as an activity that commits funds in any financial form in the
present with an expectation of receiving additional return in the future. The expectations
bring with it a probability that the quantum of return may vary from a minimum to a

7
maximum. This possibility of variation in the actual return is known as investment risk.
Thus every investment involves a return and risk.
Investment is an activity that is undertaken by those who have savings. Savings
can be defined as the excess of income over expenditure. An investor earns/expects to
earn additional monetary value from the mode of investment that could be in the form of
financial assets.
The three important characteristics of any financial asset are:
 Return-the potential return possible from an asset.
 Risk-the variability in returns of the asset form the chances of its value going
down/up.
 Liquidity-the ease with which an asset can be converted into cash.
Investors tend to look at these three characteristics while deciding on their individual
preference pattern of investments. Each financial asset will have a certain level of each of
these characteristics.

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 Investment avenues
There are a large number of investment avenues for savers in India. Some of them are
marketable and liquid, while others are non-marketable. Some of them are highly risky
while some others are almost risk less.
Investment avenues can be broadly categorized under the following heads:
Corporate securities
 Equity shares.
 Preference shares.
 Debentures/Bonds.
 Derivatives.
 Others.

Corporate Securities
Joint stock companies in the private sector issue corporate securities. These include
equity shares, preference shares, and debentures. Equity shares have variable dividend
and hence belong to the high risk-high return category; preference shares and debentures
have fixed returns with lower risk.

The classification of corporate securities that can be chosen as investment avenues can be
depicted as shown below:

Equity Preference Bonds Warrants Derivatives

Shares shares

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 Equity shares

By investing in shares, investors basically buy the ownership right to the

company. When the company makes profits, shareholders receive their share of the
profits in the form of dividends. In addition, when company performs well and the future
expectation from the company is very high, the price of the company’s shares goes up in
the market. This allows shareholders to sell shares at a profit, leading to capital gains.
Investors can invest in shares either through primary market offerings or in the
secondary market.
The primary market has shown abnormal returns to investors who subscribed for
the public issue and were allotted shares.

Stock Exchange:
In a stock exchange a person who wishes to sell his security is called a seller, and
a person who is willing to buy the particular stock is called as the buyer. The rate of stock
depends on the simple law of demand and supply. If the demand of shares of company x
is greater than its supply then its price of its security increases.
In Online Exchange the trading is done on a computer network. The sellers and
buyers log on to the network and propose their bids. The system is designed in such ways
that at any given instance, the buyers/sellers are bidding at the best prices.

The transaction cycle for purchasing and selling shares online is depicted below:

Transaction Cycle

Member/ Member/
Broking Broking
firm. Stock Exchange firm.

Client (BSE / NSE) Client

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PORTFOLIO
A portfolio is an appropriate mix of or collection of investments held by an institution or
a private individual. It is a collection of securities, since it is rarely desirable to invest the
entire funds of an individual or an institution in a single security.
 Portfolio analysis considers the determination of future risk and return in holding
various blends of individual securities.
 Portfolio expected return is a weighted average of the expected return of
individual securities but portfolio variance, in short contrast, can be something
less than a weighted average of security variances.
 As a result an investor can sometimes reduce portfolio risk by adding security
with greater individual risk than any other security in the portfolio. This is
because risk depends greatly on the co-variance among return of individual
securities.
 Since portfolios expected return is a weighted average of the expected return of its
securities, the contribution of each security to the portfolio’s expected returns
depends on its expected returns and its proportionate share of the initial
portfolio’s market value.

Basic concepts and components for portfolio management

Now that we understand some of the basic dynamics and inherent challenges
organizations face in executing a business strategy via supporting initiatives, let's look at
some basic concepts and components of portfolio management practices.

The portfolio

First, we can now introduce a definition of portfolio that relates more directly to the
context of our preceding discussion. In the IBM view, a portfolio is one of a number of
mechanisms, constructed to actualize significant elements in the Enterprise Business
Strategy.
It contains a selected, approved, and continuously evolving, collection of Initiatives
which are aligned with the organizing element of the Portfolio, and, which contribute to

11
the achievement of goals or goal components identified in the Enterprise Business
Strategy. The basis for constructing a portfolio should reflect the enterprise's particular
needs. For example, you might choose to build a portfolio around initiatives for a specific
product, business segment, or separate business unit within a multinational organization.

The portfolio structure

As we noted earlier, a portfolio structure identifies and contains a number of portfolios.

This structure, like the portfolios within it, should align with significant planning and
results boundaries, and with business components. If you have a product-oriented
portfolio structure, for example, then you would have a separate portfolio for each major
product or product group. Each portfolio would contain all the initiatives that help that
particular product or product group contribute to the success of the enterprise business
strategy.

The portfolio manage

This is a new role for organizations that embrace a portfolio management approach. A
portfolio manager is responsible for continuing oversight of the contents within a
portfolio. If you have several portfolios within your portfolio structure, then you will
likely need a portfolio manager for each one. The exact range of responsibilities (and
authority) will vary from one organization to another, 1 but the basics are as follows:

 One portfolio manager oversees one portfolio.

 The portfolio manager provides day-to-day oversight.
 The portfolio manager periodically reviews the performance of, and conformance
to expectations for, initiatives within the portfolio.
 The portfolio manager ensures that data is collected and analyzed about each of
the initiatives in the portfolio.
 The portfolio manager enables periodic decision making about the future direction
of individual initiatives.

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Portfolio reviews and decision making

As initiatives are executed, the organization should conduct periodic reviews of actual
(versus planned) performance and conformance to original expectations. Typically,
organization managers specify the frequency and contents for these periodic reviews, and
individual portfolio managers oversee their planning and execution. The reviews should
be multi-dimensional, including both tactical elements (e.g., adherence to plan, budget,
and resource allocation) and strategic elements (e.g., support for business strategy goals
and delivery of expected organizational benefits).

A significant aspect of oversight is setting multiple decision points for each initiative, so
that managers can periodically evaluate data and decide whether to continue the work.
These "continue/change/discontinue" decisions should be driven by an understanding
(developed via the periodic reviews) of a given initiative's continuing value, expected
benefits, and strategic contribution. Making these decisions at multiple points in the
initiative's lifecycle helps to ensure that managers will continually examine and assess
changing internal and external circumstances, needs, and performance.

Governance

Implementing portfolio management practices in an organization is a transformation

effort that typically involves developing new capabilities to address new work efforts,
defining (and filling) new roles to identify portfolios (collections of work to be done),
and delineating boundaries among work efforts and collections. Implementing portfolio
management also requires creating a structure to provide planning, continuing direction,
and oversight and control for all portfolios and the initiatives they encompass. That is
where the notion of governance comes into play. The IBM view of governance is: An
abstract, collective term that defines and contains a framework for organization, exercise
of control and oversight, and decision-making authority, and within which actions and
activities are legitimately and properly executed; together with the definition of the
functions, the roles, and the responsibilities of those who exercise this oversight and
decision-making.

13
Portfolio management governance involves multiple dimensions,
including:

 Defining and maintaining an enterprise business strategy.

 Defining and maintaining a portfolio structure containing all of the organization's
initiatives (programs, projects, etc.).
 Reviewing and approving business cases that propose the creation of new
initiatives.
 Providing oversight, control, and decision-making for all ongoing initiatives.
 Ownership of portfolios and their contents.

Each of these dimensions requires an owner -- either an individual or a collective -- to

develop and approve plans, continuously adjust direction, and exercise control through
periodic assessment and review of conformance to expectations.

A good governance structure decomposes both the types of work and the authority to plan
and oversee work. It defines individual and collective roles, and links them to an
authority scheme. Policies that are collectively developed and agreed upon provide a
framework for the exercise of governance.

The complexities of governance structures extend well beyond the scope of this article.
Many organizations turn to experts for help in this area because it is so critical to the
success of any business transformation effort that encompasses portfolio management.
For now, suffice it to say that it is worth investing time and effort to create a sound and
flexible governance structure before you attempt to implement portfolio management
practices.

14
RISK

Risk is a concept that denotes a potential negative impact to an asset or some

characteristic of value that may arise from some present process or future event. In
everyday usage, risk is often used synonymously with the probability of a known loss.
Risk is uncertainty of the income / capital appreciation or loss of the both.

The total risk of an individual security comprises two components, the market related risk
called systematic risk also known as undiversifiable risk and the unique risk of that
particular security called unsystematic risk or diversifiable risk.

Type of Risk

Systematic risk (market) Unsystematic risk (company risk)

Examples: Examples:

 Interest rate risk  Labor troubles

 Market risk  Liquidity problems
 Inflation risk  Raw materials risks
 Demand  Financial risks
 Government policy  Management problems
 International factors

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PHASES OF PORTFOLIO MANAGEMENT

Five phases can be identified in this process:

1. Security analysis
2. Portfolio analysis
3. Portfolio selection
4. Portfolio revision
5. Portfolio evaluation

SECURITY ANALYSIS

An examination and evaluation of the various factors affecting the value of a security.
Security Analysis stands for the proposition that a well-disciplined investor can determine
a rough value for a company from all of its financial statements, make purchases when
the market inevitably under-prices some of them, earn a satisfactory return, and never be
in real danger of permanent loss.

PORTFOLIO ANALYSIS

Analysis phase of portfolio management consists of identifying the range of possible

portfolios that can be constituted from a given set of securities and calculating their return
and risk for further analysis.

PORTFOLIO SELECTION

The proper goal of portfolio construction is to generate a portfolio that provides the
highest returns at a given level of risk. A portfolio having this characteristic is known as
an efficient portfolio. The inputs from portfolio analysis can be used to identify the set of
efficient portfolios. From this set of efficient portfolios, the optimal portfolio has to be

16
selected for investment. Harry Markowitz portfolio theory provides both the conceptual
framework and analytical tools for determining the optimal portfolio in a disciplined and
objective way.

PORTFOLIO REVISION

Having constructed the optimal portfolio, the investor has to constantly monitor the
portfolio to ensure that it continues to be optimal. Portfolio revision is as important as
portfolio analysis and selection.

PORTFOLIO EVALUATION

It is the process, which is concerned with assessing the performance of the portfolio over
a selected period of time in terms of returns and risk. This involves quantitative
measurement of actual return realized and the risk born by the portfolio over the period of
investment. It provides a feedback mechanism for improving the entire portfolio
management process.

17
 CHAPTER II

COMPANY PROFILE

18
 ICICI Securities
Limited

ICICI Securities Ltd is a

premier Indian Investment
Bank, with a dominant
position in its core segments
of its operations - Corporate
Finance including
Equity Capital Markets
Advisory Services,
Institutional Equities, Retail and Financial Product Distribution.  ICICI Securities
Limited assists global institutional investors to make the right decisions through
insightful
research
coverage
and a
client focused Sales and Dealing team.  

ICICI Securities has the largest reach to the retail segment through its two pioneering bra
Winning is a habit that is assiduously cultivated at ICICI Securities Limited (I-Sec). Be it
deals, mandates or awards, we manage them all in our quite and efficient way.

19
For us winning awards is a matter of pride and honour. Each new award is a
manifestation of our hard work and commitment to our clients
Since inception, I-Sec's expertise has been time and again widely recognized by both
domestic and international agencies.

I-Sec PD has been recognized as the ‘Best Domestic Bond House in India’ by Asiamoney
for 2002, 2003, 2004, 2005 and 2007. I-Sec PD has been awarded the prestigious ‘Best
Bond House’ by Financeasia.com for the years - 2001, nds – ICICIdirect.com and
ICICIdirect2004, 2005, 2006 and 2007. These awards are a strong testimony of our
capabilities and continuing dominant position in the market. The equities team was
adjudged the ‘Best Indian Brokerage House-2003’ by Asiamoney. The Corporate Finance
group also was awarded a runner-up Best Merchant Banker by Outlook Money in 2007.
ICICI Securities (I-Sec) topped the Prime Database League Tables 2007 for money raised
through IPOs/FPOs.

With a full-service portfolio, a roster of blue-chip clients and performance second to

none, we have a formidable reputation within the industry. Today ICICI Securities is
among the leading Financial Institutions both on the institutional as well as retail side.

The Corporate Finance team regularly ranks highest among the leading capital markets
league tables and recently topped the Prime Database League tables for funds mobilized
through equity instruments in the first half of CY 07.

Headquartered in Mumbai, I-Sec operates out of several locations in India.

20
ICICI Securities Inc., the step-down wholly owned US subsidiary of the company is a
member of the National Association of Securities Dealers, Inc. (NASD). As a result of
this membership, ICICI Securities Inc. can engage in permitted activities in the U.S.
securities markets. These activities include Dealing in Securities and Corporate Advisory
Services in the United States and providing research and investment advice to US
investors.

ICICI Securities Inc. is also registered with the Financial Services Authority, UK (FSA)
and the Monetary Authority of Singapore (MAS) to carry out Corporate Advisory
Services and Dealing in Securities.

ICICI Securities – India’s Leading Investment Bank

A subsidiary of ICICI Bank - the largest and most recognized private bank in India –
ICICI Securities Ltd is premier Indian Investment Bank, with a dominant position in its
core segments of its operations - Corporate Finance including Equity Capital Markets
Advisory Services, Institutional Equities, Retail and Financial Product Distribution With
a full-service portfolio, a roster of blue-chip clients and performance second to none, we
have a formidable reputation within the industry. I

21
I

22
 CHAPTERIII
ANALYSIS &
INTERPRETATIN

23
MODELS

Some of the financial models used in the process of Valuation, stock selection, and
management of portfolios include:

 Maximizing return, given an acceptable level of risk.

 Modern portfolio theory—a model proposed by Harry Markowitz among others.
 The single-index model of portfolio variance.
 Capital asset pricing model.
 Arbitrage pricing theory.
 The Jensen Index.
 The Tenor Index.
 The Sharpe Diagonal (or Index) model.
 Value at risk model.

MARKOWITZ: PORTFOLIO SELECTION MODEL

The basic portfolio model, developed by Harry Markowitz, derived the expected rate of
return for a portfolio of assets and an expected risk measure. Markowitz showed that the
variance of the rate of return was meaning full measure of risk under a reasonable set of
assumptions and derives the formulas for computing the variance of the portfolio. This
portfolio variance formulation indicated the importance of diversification for reducing
risk, and showed how to properly diversify.

PARAMETERS OF MARKOWITZ: THE MEAN VARIANCE CRITERION

Based on his research, for building up the efficient set of portfolio, as laid down by
Markowitz, we need to look into these important parameters.

1. Expected return

2. Variability of returns as measured by standard deviation from the mean.

24
 3. Covariance or variance of one asset return to other asset returns.

ASSUMPTIONS OF MARKOWWITZ MODEL:

1. Investors consider each investment alternative as being represented by a

probability distribution of expected returns over some holding period.

2. Investors maximize one period expected utility and possess utility curves that
demonstrate diminishing marginal utility of wealth.

3. Individuals estimate risk on the basis of the variability of expected returns.

4. Investors base decisions solely on expected return and risk; i.e, their utility curves
are a function of expected return and variance (or standard deviation) of returns
only.

5. For a given risk level, investors prefer higher returns to lower returns. Similarly,
for a given level of expected return, investors prefer less risk to more risk.

EXPECTED RISK CALCULATION:

PORTFOLIORISK = SQRT [((XX2*SDX2)+

(XY2*SDY2)+(2*XX*XY*(rXY*SDX2*SDY2)))]

WHERE

Xx, Xy = proportion of total portfolio invested in security X& Y respectively

sdx, sdy = standard deviation of stock X & stock Y respectively

rxy = correlation coefficient of x & y

EXPECTED RETURN OF A PORTFOLIO CALCULATION:

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 PORTFOLIO RETURN =[(XX*RX)+(XY*RY)]

WHERE

XX = proportion of total portfolio invested in security X

XY = proportion of total portfolio invested in security Y

RX = expected return to security X

RY = expected return to security Y

FORMULAS USED IN MARKOWITZ MODEL

Arithmetic return

Where

 Vi is the initial investment value and

 Vf is the final investment value

This return has the following characteristics:

 ROIArith = + 1.00 = + 100% when the final value is twice the initial value
 ROIArith > 0 when the investment is profitable
 ROIArith < 0 when the investment is at a loss
 ROIArith = − 1.00 = − 100% when investment can no longer be recovered

STANDARD DEVIATION

 = Square root ((mean return -expected return)^2/N)

COVARIANCE

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COV (X, Y)=1/N[(RX-RX)(RY-RY)

BETA:

The Beta coefficient, in terms of finance and investing, is a measure of a stock (or
portfolio)’s volatility in relation to the rest of the market. Beta is calculated for individual
companies using regression analysis.

The beta coefficient is a key parameter in the capital asset pricing model (CAPM). It
measures the part of the asset's statistical variance that cannot be mitigated by the
diversification provided by the portfolio of many risky assets, because it is correlated
with the return of the other assets that are in the portfolio.

For example, if every stock in the New York Stock Exchange was uncorrelated with
every other stock, then every stock would have a Beta of zero, and it would be possible to
create a portfolio that was nearly risk free, simply by diversifying it sufficiently so that
the variations in the individual stocks' prices averaged out. In reality, investments tend to
be correlated, more so within an industry, or when considering a single asset class (such
as equities). This correlated risk, measured by Beta, is what actually creates almost all of
the risk in a diversified portfolio.

The formula for the Beta of an asset within a portfolio is

Where

ra measures the rate of return of the asset,

rp measures the rate of return of the portfolio of which the asset is a part

27
And Cove (ra, rp) is the covariance between the rates of return.

In the CAPM formulation, the portfolio is the market portfolio that contains all risky
assets, and so the rp terms in the formula are replaced by rm, the rate of return of the
market.

The beta movement should be distinguished from the actual returns of the stocks. For
example, a sector may be performing well and may have good prospects, but the fact that
its movement does not correlate well with the broader market index may decrease its
beta. Beta is a measure of risk and not to be confused with the attractiveness of the
investment.

THE SECURITY MARKET LINE

The Security Market Line (SML) is the graphical representation of the Capital Asset
Pricing Model. It displays the expected rate of return for an overall market as a function
of systematic (non-diversifiable) risk (beta).

The x-axis represents the risk (beta), and the y-axis represents the expected return. The
market risk premium is determined from the slope of the SML.

The securities market line can be regarded as representing a single-factor model of the
asset price, where Beta is exposure to changes in value of the Market. The equation of the
SML is thus:

28
IMPLICATIONS FOR INVESTORS FROM THE MEASUREMENT OF PORTFOLIO
RISK

If the investor conservative and interested in low variability of portfolio returns from the
expected return (actual realizable return not from expected), he should:

1. Invest his funds in securities with low standard deviations, and

2. Ensure that the securities chosen for his portfolio have relatively low coefficients
of correlation with one another.

Theoretically, if it is possible, he should include some securities with negative

coefficients of correlation with other securities in the portfolio.

29
 ICICI BANK

Business Profile
ICICI Bank was promoted in 1994 by ICICI Ltd., an Indian development financial
instituition. The two entities subsequently merged to become the largest comercial bank
in the private sector.
A new generation bank, ICICI Bank started with all the latest technologies to hit
the Indian banking industry in the second half of the ninties. All its branches are fully
computerised with the state-of-the-art technology and systems, networked through VSAT
technology. The bank is connected to the SWIFT International network.
In 2005, it expanded its network to 562 branches and 1,910 ATMs. It continued to
expand its electronic channels, namely internet banking, mobile banking, call centres and
ATMs, and migrate customer transaction volumes to these channels. Over 70% of
customer induced transactions take place through these electronic channels.
It has acquired a small Russian banking entity, Investitsionno-Kreditny Bank
(IKB), which will help boost its corporate business and deposit franchise overseas. The
bank has also built several strategic alliances with banks like Wells Fargo in USA,
Lloyds TSB in UK and DBS in Singapore.
ICICI has entered into strategic alliance with Prudential plc. of UK for its mutual
find buisness. The duo have been fairly aggressive through their companies, Prudential
ICICI Asset Management Company Limited and Prudential ICICI Trust Limited.

The bank is also keen to offer its services to the Indian agricultural sector. Over
2,000 Internet kiosks and 70 agri-desks have been established in locations with large
agricultural markets.

Recent Developments
ICICI Bank launched `Mutual Fund Sweep Account` - an automatic sweeping
facility which allows current account holders to park their short-term surpluses into liquid
mutual funds and earn higher returns. Initially, ICICI Bank current account customers

30
will have the facility to invest their account surpluses in the liquid fund schemes of
Prudential ICICI Asset Management Company and GIC Mutual Fund.

The bank is in the process of the reverse merger of ICICI with ICICI Bank. The
merger of two wholly-owned subsidiaries of ICICI, ICICI Personal Financial Services
Limited and ICICI Capital Services Limited, with ICICI Bank is also underway.

ICRA has assigned an A1+ rating, indicating highest safety in the short-term, to
the Rs 500 crore certificates of deposit (CD) programme of ICICI Bank Ltd (IBL). The
rating agency said in its report that the rating takes into consideration IBL`s strategic
importance to its parent ICICI, IBL`s comfortable profitability and capital adequacy,
good control on asset quality.

31
 2008

                   
Prev Open High Low Last Close Total Traded Turnover in
Series Date Close Price Price Price Price Price Quantity Lacs
1187.4
EQ Jan 0 1190 1131 1147 1147 1169.06 5525805 64600.06
1105.8 1045.4 1088.5
EQ Feb 5 1100 5 1077.65 0 1079.42 3665904 39570.53
EQ Mar 835.50 848.85 765 769 769.40 785.02 5048217 39629.35
EQ Apr 902.50 918 872 881 879.60 886.81 4446390 39431.01
EQ May 796.25 795.25 778.2 786.55 788.6 787.09 6852195 53932.8
EQ Jun 652.15 664.8 611.35 635 630.2 626.79 6725234 42153.09
EQ Jul 636.1 638 621.15 633 637.3 632.02 5333027 33705.611
EQ Aug 632.55 644.5 642.65 670.65 671.9 671.55 8633379 57977.632
EQ Sep 493.3 485.9 460.05 540 535.55 517.95 21452818 111113.883
EQ Oct 345.35 370.55 363 399.5 398.75 384.89 14134982 54403.601
EQ Nov 350.85 340 316.35 354 351.65 348.13 12329653 42923.30
EQ Dec 458.6 472.8 444 447.6 448.1 452.42 7794740 35264.774

STATE BANK OF INDIA

32
The Bank is actively involved since 1973 in non-profit activity called Community
Services Banking. All our branches and administrative offices throughout the country
sponsor and participate in large number of welfare activities and social causes. Our
business is more than banking because we touch the lives of people anywhere in many
ways.
There commitment to nation-building is complete & comprehensive.
The evolution of State Bank of India can be traced back to the first decade of the 19th
century. It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June
1806. The bank was redesigned as the Bank of Bengal, three years later, on 2 January
1809. It was the first ever joint-stock bank of the British India, established under the
sponsorship of the Government of Bengal. Subsequently, the Bank of Bombay
(established on 15 April 1840) and the Bank of Madras (established on 1 July 1843)
followed the Bank of Bengal. These three banks dominated the modern banking scenario
in India, until when they were amalgamated to form the Imperial Bank of India, on 27
January.1921.

An important turning point in the history of State Bank of India is the launch of the first
Five Year Plan of independent India, in 1951. The Plan aimed at serving the Indian
economy in general and the rural sector of the country, in particular. Until the Plan, the
commercial banks of the country, including the Imperial Bank of India, confined their
services to the urban sector. Moreover, they were not equipped to respond to the growing
needs of the economic revival taking shape in the rural areas of the country. Therefore, in
order to serve the economy as a whole and rural sector in particular, the All India Rural
Credit Survey Committee recommended the formation of a state-partnered and state
sponsored The All India Rural Credit Survey Committee proposed the take over of the
Imperial Bank of India, and integrating with it, the former state-owned or state-associate
banks. Subsequently, an Act was passed in the Parliament of India in May 1955. As a
result, the State Bank of India (SBI) was established on 1 July 1955. This resulted in
making the State Bank of India more powerful, because as much as a quarter of the
resources of the Indian banking system were controlled directly by the State. Later on, the
State Bank of India (Subsidiary Banks) Act was passed in 1959. The Act enabled the

33
State Bank of India to make the eight former State-associated banks as its subsidiaries.
The State Bank of India emerged as a pacesetter, with its operations carried out by the
480 offices comprising branches, sub offices and three Local Head Offices, inherited
from the Imperial Bank. The corporate center of SBI is located in Mumbai. In order to
cater to different functions, there are several other establishments in and outside Mumbai,
apart from the corporate center. The bank boasts of having as many as 14 local head
offices and 57 Zonal Offices, located at major cities throughout India. It is recorded that
SBI has about 10000 branches, well networked to cater to its customers throughout India.

ATM SERVICE
SBI provides easy access to money to its customers through more than 8500 ATMs in
India. The Bank also facilitates the free transaction of money at the ATMs of State Bank
Group, which includes the ATMs of State Bank of India as well as the Associate Banks –
State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, etc. You
may also transact money through SBI Commercial and International Bank Ltd by using
the State Bank ATM-cum-Debit,(Cash,Plus),card.

Subsidiaries
The State Bank Group includes a network of eight banking subsidiaries and several non-
banking subsidiaries. Through the establishments, it offers various services including
merchant banking services, fund management, factoring services, primary dealership in
government,securities,credit,cards,and,insurance.

The eight banking subsidiaries are:

 State Bank of Bikaner and Jaipur (SBBJ)

 State Bank of Hyderabad (SBH)
 State Bank of India (SBI)
 State Bank of Indore (SBIR)

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  State Bank of Mysore (SBM)
 State Bank of Patiala (SBP)
 State Bank of Saurashtra (SBS)
 State Bank of Travancore (SBT)

ProductsAnd Services

Personal Banking

 SBI Term Deposits SBI Loan For Pensioners

 SBI Recurring Deposits Loan Against Mortgage Of Property
 SBI Housing Loan Loan Against Shares & Debentures
 SBI Car Loan Rent Plus Scheme
 SBI Educational Loan Medi-Plus Scheme

Other Services

 Agriculture/Rural Banking
 NRI Services
 ATM Services
 Demat Services
 Corporate Banking
 Internet Banking
 Mobile Banking
 International Banking
 Safe Deposit Locker
 RBIEFT
 E-Pay
 E-Rail
 SBI Vishwa Yatra Foreign Travel Card
 Broking Services
 Gift Cheques

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 Turnover
Prev Open High Low Last Close Total Traded in
Series Date Close Price Price Price Price Price Quantity Lacs
2,223.9 2,155.0 2,247.7 2,136.0 2,165.0 2,167.3 25,347.4
EQ JAN 5 0 0 0 0 5 1159043 4
2,039.1 2,010.0 2,135.0 1,945.0 2,088.8 2,111.6 48,660.4
EQ FEB 0 0 0 0 0 5 2401205 8
1,677.8 1,674.0 1,695.0 1,590.0 1,608.0 1,600.2 16,712.8
EQ MAR 0 0 0 0 0 5 1036121 9
1,795.5 1,799.0 1,821.0 1,730.0 1,781.0 1,774.6 14,987.1
EQ APR 5 0 0 0 0 5 839999 8

1461.15 1465.05 1489 1435.35 1445 1445 867328 12613.70

EQ MAY

1161.2 1194.95 1194.95 1101 1107 1111.6 787863 8940.20

EQ JUN

1387.95 1390 1430.9 1343 1406 1417.25 1885052 26136.91

EQ JUL

1309.35 1336 1409.8 1336 1404.55 1403.85 2661636 36957.08

EQ AUG

1405.45 1385 1485 1355 1472 1463.35 2229762 32255.34

EQ SEP

1099.55 1149.95 1177 1065.5 1114 1109.7 4293292 48015.33

EQ OCT
1105 1065 1109.9 1055 1085.05 1088.55 4321864 46965.76
EQ NOV
1291.7 1308 1308 1270 1290 1288.8 2704078 34799.18
EQ DEC

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37
 CHAPTER IV
CONCLUSION AND
SUGGESTIONS

38
 Conclusions
 Average rate of return of the 2 different companies are lesser than that of its
market returns. So, the returns are better than the market returns.
 Since standard deviation of SBI equity and ICICI equity is less than its market,
the risk is likely less compared to that of market.
 Lower the beta and higher the funds performance is the better equity for
investment. One might expect the best performance by funds with low
diversification because they apparently are attempting to beat the market by
being unique in their selection or timing.
 Since Beta (0.6085) of ICICI Bank is less than that of markets beta , the fund
reacts less than the market reaction. Also beta indicates that the funds returns
would increase or decease by 0.6% for every 1 % increase or decrease in the
market returns. This also means that the mutual fund fluctuates 4% less than the
market index.
 Considering only the rate of return, all the equities outperformed the market.

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 CHAPTER V
BIBLIOGRAPHY

40
 BIBLIOGRAPHY

www.nseindia.com
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Security Analysis And Protfolio Management
---Donald D.Fischer
---Ronald J.Jordan

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