Raising of Finance & Project Finance Project Report

RAISING OF FINANCE
Finance for a Project in India can be raised by way of
(A) Share Capital
(B) Long term borrowings
(C) Short term borrowings

Both share capital and long term borrowings are used to finance fixed assets plus the margin money required to obtain bank borrowings for working capital. Working capital is financed mainly from bank borrowings and from unsecured loans and deposits.

Share Capital consists of two broad categories of capital namely equity and preference. Equity shares have a fixed par value and can be issued at par or at a premium on the par value. Shares cannot normally be issued at a discount. However, in exceptional circumstances issue of shares at a discount is permitted provided (a) the shares are of a class already existing, (b) the discount is authorised by the shareholders, and (c) the issue .is sanctioned by the Central Government. Normally the Central Government will not sanction a discount exceeding 10%.

The corporates are now allowed to raise resources for expansion plans. by issuing equity shares with differential voting rights. The main advantages of such category of shares are :
1. Equity can be raised without diluting stake of the promoters.
2. Companies can reduce gearing ratios.
3. The risk of hostile takeovers is reduced to a considerable extent.
4. The passing of yield in the form of high dividends to the investors can be ensured.

The following are the general disadvantages
1. The cost of servicing equity capital will increase.
2. Poor corporate governance may be encouraged.
3. If issued at discount, they may raise the equity burden.

Preference shares carry a fixed rate of dividend (which can be cumulative). These shares carry a preferential right to be paid on winding up of the company. Preference shares can be made convertible into equity shares. Issue of preference is not a popular form of capital issue.

The issue of capital by companies is governed by guidelines issued by the Securities and Exchange Board of India (SEBI) and the listing requirements of the stock exchanges.

Apart, from equity, there can also be various forms of pseudo equity. The most common forms are fully or partly convertible debentures and debentures, issued with warrants entitling the holder to subscribe for equity. There can also be an issue of non convertible debentures.

Term finance is mainly provided by the various All India Development Banks (IDBI, IFCI, SIDBI, IIBI etc.), specialised financial institutions (RCTC, TDICI, TFCI) and investment institutions (LIC, UTI and GIC). In addition, term finance is also provided by the State financial corporations, the State industrial development corporations and commercial banks. Debt instruments issued by companies are also subscribed for by mutual funds and financing activities are also done by finance companies.



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Project Report on ICICI Bank

BANKING IN INDIA:
Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process.

HISTORY:
The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below:

PHASE I
Early phase from 1786 to 1969 of Indian Banks

PHASE II
Nationalization of Indian Banks and up to 1991

PHASE III
Indian Financial & Banking Sector Reforms after 1991.



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Project Report on Currency Derivatives

INTRODUCTION TO CURRENCY MARKETS

BASIC FOREIGN EXCHANGE DEFINITIONS

Spot: Foreign exchange spot trading is buying one currency with a different currency for immediate delivery.
The standard settlement convention for Foreign Exchange Spot trades is T+2 days, i.e., two business days from the date of trade.

Forward Outright: A foreign exchange forward is a contract between two counterparties to exchange one currency for another on any day after spot. In this transaction, money does not actually change hands until some agreed upon future date. The duration of the trade can be a few days, months or years. For most major currencies, three business days or more after deal date would constitute a forward transaction

Base Currency / Terms Currency: In foreign exchange markets, the base currency is the first currency in a currency pair. The second currency is called as the terms currency. Exchange rates are quoted in per unit of the base currency. E.g. The expression US Dollar–Rupee, tells you that the US Dollar is being quoted in terms of the Rupee. The US Dollar is the base currency and the Rupee is the terms currency.
Exchange rates are constantly changing, which means that the value of one currency in terms of the other is constantly in flux. Changes in rates are expressed as strengthening or weakening of one currency vis-à-vis the other currency. Changes are also expressed as appreciation or depreciation of one currency in terms of the other currency. Whenever the base currency buys more of the terms currency, the base currency has strengthened / appreciated and the terms currency has weakened / depreciated. E.g. If US Dollar–Rupee moved from 43.00 to 43.25, the US Dollar has appreciated and the Rupee has depreciated.

Swaps: A foreign exchange swap is a simultaneous purchase and sale, or sale and purchase, of identical amounts of one currency for another with two different value dates. Foreign Exchange Swaps are commonly used as a way to facilitate funding in the cases where funds are available in a different currency than the one needed. Effectively, each party to the deal is given the use of an amount of foreign currency for a specific time. The Forward Rate is derived by adjusting the Spot rate for the interest rate differential of the two currencies for the period between the Spot and the Forward date. Liquidity in one currency is converted into another currency for a period of time.



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Analysis of Demat Account and Online Trading Project Report

EXECUTIVE SUMMARY
The commencement of E-Trading and Demat has transformed the capital market in India. With the help of Demat and Trading account, buying and selling of shares has become a much faster and even process than trading with the assistance of a physical broker. It provides for the assimilation of bank, broker, stock exchange and depository participants. This helps to get rid of the painstaking procedure of investing in stock exchange. Today, if one wants to invest in stock market, he has to contact a broker on phone or meet him personally to place order. A broker generally gives such importance and additional service only to high net worth customers. But the introduction of Internet trading, even a common or a small investor gets an opportunity to avail the service at an affordable price which is much lesser than what is charged by a physical broker over the phone. Online trading has given customer a real time access to account information, stock quotes elaborated market research and interactive trading. The prerequisites of Internet trading are a computer, a modem and a telephone connection, registration with broker, a bank a/c and depository account. The introduction of depository service is considered as the beginning of the trading of Stocks @ click. This means that you can arrange delivery of scrips sold anytime, anywhere to anyone by click of a mouse. Dematerialization facilitates to keep the securities in electronic form instead of paper form. It offers more advantageous than the physical certificate form. Despite the advantages of Dematerialization, the awareness levels among the investors relating to Demat account is not adequate because of numerous reasons. The investors are not sufficiently responsive of the concept of Demat account and the various financial institutions providing such services. This study involves understanding the various concepts of Demat and analyzing the investment pattern of individuals in India and a study on Analysis of awareness among investors regarding On Line Trading and Dematerialization has been submitted to Pune Institute of Business management, Pune in partial fulfillment of post graduate programme (PGPBM+MBA).

OBJECTIVES AND LIMITATIONS

Objectives:
An objective is the brainchild behind any project report. A project report will always have a certain objective which needs to be accomplished. Following are the objectives behind the preparation of my project at Indiabulls securities Ltd.

=> To Compare Indiabulls Online share trading account with the big players in the Market i.e. ICICI, KARVY, HDFC, RELIENCE MONEY as well as with INDIA INFOLINE
.
=> Identify the areas where INDIABULLS Scores above its competitors and what are its weak links.

=> Know the market potential of INDIABULLS considering the fact that there are many competitors in this field with some more firms expected to join the fray in the near future. This will be done with the help of a questionnaire. Provide suggestions to the company regarding what else it can do to stand apart in this ever competitive field and thereby emerge as a market leader.


=> To understand the company, its achievements and tasks, products and services and also to collect information about its competitors, its products and services offered.

=> After understanding and collecting information about the organization and its competitors, a trainee will be able to work well for the organization.


=> To Study present online share trading



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An Empirical Study on Universal Banking and its Potential for Indian Market Consumers Project Report

ABSTRACT

Different types of financial products and services penetrate our daily activities. As a major group of financial institutions, banks have been expanding their service scope, and hence, universal banks, which provide a variety of financial products and services in one house, have experienced growing popularity in some industrialized countries. In India, banking institutions have assumed a key role in the simplistic financial sector. Commercial banks have made effort to diversify their products and services, but a lengthy process is expected for their transition into truly universal banks. It is argued that the current structure and practices of the local market also contribute to this lengthy transformation. Thus, banks, which assume a leading position in most financial systems, have to be prepared for the growing need of their customers. Also, government should provide necessary assistance to banks for aiding them to get converted into universal banking system for the benefit of Indian customers.

INTRODUCTION
Banking institutions are dominant operators in modern financial systems and important business entities in an economy. They are divided into two separate types of institutions, namely commercial banks and investment banks in some countries, while in other countries such division is vague or even non-existent. The so-called universal banks engage in all forms of commercial and investment banking, not only including lending and deposit taking, but also underwriting securities and securities trading. In particular, some universal banks may own significant equity interests in companies with voting rights.
Germany is the typical example running the universal banking system. Canada and Switzerland, among others, are noteworthy examples moving towards universal banking. Despite the growing popularity of universal banks in a global context, the United States continues to block commercial banks from engaging in securities transaction and underwriting. Hence, it is argued that the practice of universal banking may not be suitable for all financial systems.
This project is designed to discuss primary practices of universal banks and their relevance to banking activities in India. The objective is to analyze whether the concept of Universal Banking, if implemented by Indian banks, have potential for Indian market consumers.



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