A SUMMER INTERNSHIP PROJECT

REPORT
ON
EQUITY ADVISORY UNDER INDIA
INFOLINE LTD.

Submitted in partial Fulfilment of requirements for the award of Degree of

Bachelor of Business Administration

Submitted
by:
HARSHIT JAIN
161001047

Under the Guidance of

Dr. Anuradha Agarwal

MANIPAL UNIVERSITY JAIPUR

1
 DECLARATION

I, HARSHIT JAIN, do hereby declare that the Summer Internship Project on ‘A Study on
Equity Advisory’ in INDIA INFOLINE LTD. (IIFL), has been undertaken by me as part of my
studies in the degree of Bachelor of Business Administration, I have completed this study under
the guidance of Mr. RAJESH JAIN Head of Finance Department, IIFL, Jaipur.

I also declare that this work has not been submitted for the award of any degree, diploma,
associateship or fellowship or any other title in this University or any other University.

Place: Jaipur (Name & Signature)

Harshit Jain

161001047

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 CERTIFICATE

This is to certify that the Summer Internship Project submitted by Mr. Raghav Bansal in the
Equity department of IIFL, is a record of project work done by him during the academic year
2016-17 under my guidance and supervision in partial fulfillment of Bachelor of Commerce
(Hons). This Summer Internship Project has not been submitted for the award of any degree,
diploma, associateship or fellowship or any other title in this University or any other
University.

Place: Bangalore (Name & Signature of the Guide)

Date: Mr Raghunandan

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 ACKNOWLEDGEMENTS

It is a great opportunity & pleasure for me to express my profound gratitude towards all the
individuals who directly or indirectly contributed towards completion of this report.

Working on this report was a great fun, excitement, challenges and a new exposure
in the field of finance. I am greatly in debt to under whose guidance and concern I
am able to bring the report into its real shape.

I am thankful to Mr. Subhash Chandra Sharma (HOD) and all faculty members of
School of Business & Commerce in providing me useful guidance for the
completion of this report. I convey my gratitude to all those who are directly or
indirectly related in the completion of this project report.

HARSHIT JAIN
Registration no.- 161001047
Course- BBA 5th semester

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 INDEX

1. INTRODUCTION 6
2. CHAPTER 1 - COMPANY PROFILE AND EVOLUTION 7
3. CHAPTER 2 – FUNCTIONAL AREAS 27
4. CHAPTER 3 – SWOT ANALYSIS 32
5. CHAPTER 4- ORGANIZATIONAL PRACTICES 34
6. CONCLUSION 37
7. ON THE JOB TRAINING 43
8. REFERENCES 45

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 INTRODUCTION

Location INDIAN INFOLINE JAIPUR C-CHEME ,Year of incorporation 1995 Industry

Financial Services Key businesses Credit & Finance, Wealth Management, Financial Product
Distribution, Capital Market Related Employees 14,000+ Business locations Around 4,000
locations in 900 cities and towns Global reach Singapore, Dubai, New York, Mauritius, UK,
Hong Kong, Switzerland Listings NSE, BSE Listing date 17 May, 2005.
IIFL (India Infoline Finance Ltd.) was founded in 1996 by Mr. Nirmal Jain (Chairman) as an
independent business research and information provider. It gradually evolved into a financial
services solution provider. IIFL has a network of 3000 business locations spread
over more than 500 cities and towns across India.
IIFL is listed on the Bombay Stock Exchange (BSE) and
the National_Stock_Exchange_of_India (NSE) for securities trading; with MCX, NCDEX and
DGCX for commodities trading; and with CDSL and NSDL as depository participants. IIFL is
registered as a Category I merchant banker and is a SEBI registered portfolio manager.
In 2008 they started with their Private Wealth division, known as IIFL Private Wealth
Awards Best Customer Service in Financial Services, 2013 - Retailer Customer Service
Awards Best Commodities Investment, 2012 – Euro Money Top Performer, Equity (FI
Category), 2012 – BSE Best Broking House with Global Presence, 2011 & 2012 – D&B No.
1 in Fixed Income Portfolio Management in India, 2012 – Euro Money.

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 Company Profile and Evolution

The evolution of IIFL from a dream of 5 young men to one of the biggest names in the
financial industry is overwhelming.

 Started in 1982 as a RTA (Registering and Transferring Agent).

 The first big move by IIFL was in the year 1987 when it set up its first branch in
Mumbai.
 The turning point came in the year 1989 when it decided to enter into one of the
emerging and underutilized segment of the Indian Markets, i.e. ; stock broking.
 In 1989, IIFL also became a member of Bombay Stock Exchange through its
association firm, ‘IIFL securities ltd’.
 IIFL entered into retail stock broking in the year 1990.
 . IIFL investor service centres were set up in the year 1992
 . IIFL which already enjoyed a wide network through its investor services centres,
entered into financial product distribution services in the year 1993
 In the year 1994, IIFL started dealing in mutual funds
 It then stepped into corporate finance and investment banking in the year 1995.
 IIFL again hit the limelight by becoming the first registrar in the country to be
awarded ISO 9002 in the year 1997.
 Later, IIFL stepped into the Information Technology (IT) sector by setting up its own
BPO units, and establishing avenues for e-business through its website
www.IIFL.com.
 In the year 2001, IIFL entered the insurance services business with the launch of its
retail arm “IIFL fin polis: your personal finance advisor”.
 Then in the year 2002 it launched its PCG (Private Client Group) which looks after
its High Net worth Individuals and maintains their portfolio and provides them with
other financial services.
 In the year 2003, it commenced secondary debt and Wholesale Debt Market (WDM)
trading.
 In the year 2004, IIFL launched ‘IIFL Global Services Limited’ after entering into a
joint venture with ‘Computershare’, Australia.
 The year 2004 also saw IIFL entering into the commodities markets through ‘IIFL
Comrade’.

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  Year 2005 saw IIFL establishing a separate branch for its insurance services under
the head ‘IIFL Insurance Broking ltd’.
 In 2005, after being impressed with the rapid growth of IIFL, PCG group of Hong
Kong acquired 25% stake at IIFL.
 In the year 2006, IIFL entered into real estate sector through IIFL realty& services
(India) ltd.

IIFL’s massive but systematic growth is a result of being able to understand the pulse of the
market and taking optimum advantage of being the first entrants in various financial and non-
financial segments.

Hence, the sheer power and dominance of the companies under the IIFL group as well as
IIFL’s strong client base truly justifies its position as one of the top financial firms in India.

The same is illustrated in the image below:

Success Sutras

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The success story of IIFL is driven by 8 success sutras adopted by it. Namely :

 Trust
 Integrity
 Dedication
 Commitment
 Hardwork
 Teamwork
 Empathy
 Innovation

These are the values that bind success with IIFL.

Vision

To achieve & sustain market leadership, IIFL shall aim for complete customer satisfaction,
by combining its human and technological resources, to provide world class quality services.
In the process IIFL shall strive to meet and exceed customer’s satisfaction and set industry
standards.

Mission

“Our mission is to be a leading and preferred service provider to our customers, and we aim
to achieve this leadership position by building an innovative, enterprising, and technology
driven organization which will set highest standards of service and business ethics.”

I did my internship from the stock broking wing of the IIFL Group, i.e. IIFL

Strategies

 The IIFL Group provides financial services by understanding the customers' needs
and develops innovative and customized portfolios. Their core business objective is to
ensure the clients' financial well-being. In this regard, they follow a range of strategic
investment solutions by leveraging deep-domain knowledge and research capital

 Commitment to a fundamental-based ethical approach supported by in-house research

expertise that is free of preconceived notions.

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  Conservatism woven into all of the Group's product offerings. These are based on the
philosophy of a clear open architecture behind every asset allocation at the core of
every product portfolio, and a sharp focus on a research-based approach in product
selection.

 Implementing only tried and trusted investment strategies across all portfolio
segments.

 A multi-segment advisory approach where each segment meets its specific advisory
objectives.

 Expertise in evolving a product spectrum in the market, which stems from the
knowledge that as valuations mature, the asset categories must themselves evolve.

Customer-focused advisory business protecting client's interest at every stage through

tracking, auditing and validation procedures at customer level. This is supported by tools to
control execution and products to support the customer's needs

IIFL Stock Broking Limited

I did my internship in IIFL which is the broking arm of IIFL Group, and is a well diversified
conglomerate whose business encompasses the entire financial services spectrum along with
data processing and managing segments.

IIFL’s financial services business is ranked among the top-five in the country across its
business segments. The Group services over 70 million individual investors in various
capacities and provides investor services to more than 600 corporate houses, comprising the
best of Corporate India.

IIFL prides itself on being extremely customer centric at all times providing leading edge
technology combined with professional management and servicing through a wide network
of offices across India.

IIFL Stock Broking Limited (IIFL) is among the country’s leading financial services
organizations renowned for its quality of investment and advice. IIFL through its wide
network of offices across India offers customized investment solutions to corporate,
institutions and individual investors.

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 IIFL helps investors construct a portfolio by factoring in their risk profile and future financial
needs so that their investments achieve an optimal balance between risk and returns.

Our comprehensive trading account helps clients approach various investment avenues in an
integrated fashion, providing them the facility to transact with ease. We have a combined
account facility that caters to all investment opportunities such as trade in Equities,
Derivatives, Currency and also investing in IPOs, Mutual funds and NCDs.

Awards and Accolades

 Winners of SKOCH-BSE Order of Merit award 2015

 Winners of SKOCH-BSE Aspiring Nation award 2015

 Won ‘NSDL Star Performer Award 2014 for Highest Asset Value’

 Won ‘Largest E-Broking House in India by Dun & Bradstreet 2010

 Won ‘Broker with Best corporate desk for commodity broking 2011’

 India’s no I registrar and securities transfer agent

 ISO 9002 Certified Operations by DNV

 Largest Independent Distributor

 Most of India’s 500 fortune companies are serviced by IIFL

 Every 20th trade in stock market is done on the IIFL platform

 Every 6th investor in India invests through IIFL

 Amongst top 10 stock brokers in India

 Amongst top 3 depository participants

 Amongst top 10 investment bankers

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 Organisational Structure

The organisational structure of IIFL Group is displayed in the chart below :-

Board of Directors

 Mr. C. Parthasarathy
Chairman & Managing Director
 Mr. M. Yugandhar
Managing Director
 Mr. M. S. Ramakrishna
Director

 MANAGEMENT TEAM
 Mr. V.Mahesh
Managing Director – IIFL Data Management
 Mr. V. Ganesh
CEO – IIFL Computershare
 Mr. Sushil Sinha
Wholetime Director - IIFL Comtrade
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 Mr. P. B. Ramapriyan
Vice President & Head - Financial Product Distribution
 Mr. Rajiv R. Singh
Vice President & Business Head - IIFL Stock Broking Limited
 Mr. J. Ramaswamy
Group Head - Corporate Affairs
 Mr. Deepak Gupta
Group Head - HR
 Mr. G. Krishna Hari
Group Head – Finance

Organisation Structure of IIFL Stock Broking Limited (IIFL)

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 Products

I] Equity

Equity is difference of the value of assets and liabilities of a company. Shareholder's equity
represents the equity of a company as divided amongst individual shareholders. It is
shareholder's equity which are traded on exchanges under different segments including Cash,
Futures and Options.

The different options available for a person dealing in Equity are as follows :-

1) Delivery Trading: Stocks are bought by paying full price with no margin given. This
facility allows clients to place orders for transactions on stock exchanges which are
intended for delivery into their demat (dematerialisation) account. IIFL facilitates in
taking the right position through different in-house research reports.

2) Day Trading: This is suitable for investors who are interested in Intra-Settlement
trading for transactions bought and sold within the same trading day. You can also
leverage your position and trade more than your available funds. IIFL facilitates
various recommendations during trading hours on their online trading terminal in
order to serve clients better.

3) Buy Today Sell Tomorrow (BTST): This is a facility offered by IIFLonline.com

wherein the client will be able to sell the shares that he/she has purchased the previous
day even before receiving the delivery of the shares from the Exchange.

4) After Market Order (AMO): Stock market opens at 9.15 am and closes at 3.30 pm
on weekdays. For many of you, stock market trading or investing may not be a
primary profession and you could be busy. IIFLonline.com offers you the After
Market Order (AMO) feature, which helps you to place an order beyond the regular
trading hours. This facility is provided to all customers who have online trading
accounts.

5) Market Order: You could trade by placing market orders during market hours that
allows you to trade at the best obtainable price in the market at the time of execution
of the order.

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 6) Limit Order: It allows you to place a buy/sell order at a price defined by you.

The execution can happen at a price more favourable than the price which is
defined by you. Limit orders can be placed during holidays & non market hours
too.

7) Cover Order: You can place a buy order and corresponding sell stop loss order
at one go instead of placing two orders and vice versa. The stop loss helps the
client in covering the loss.

8) Basket Order: Basket orders are a utility available in IIFL online.com, wherein you
can place multiple orders at one time
9) Bracket Order: Bracket orders are designed to help limit your loss and lock in a
profit by "bracketing" an order with two opposite-side orders. A BUY order is
bracketed by a high-side sell limit order and a lower-side sell stop order. A SELL
order is bracketed by a higher-side buy stop order and a lower side buy limit order.

.IIFL’s online website, IIFLonline.com offers users various options while trading in equities
such as Delivery, Day trading etc. All this options are designed to suite your trading needs.

II] Derivative

A derivative is a contract between two parties which derives its value from an underlying
asset which can be an Index, Equity, Commodities, etc. This investment option provides a
good leverage opportunity and is a great tool for speculation. It can be traded in index futures
and index options, stock futures and stock options.

The different types of derivatives are :-

a) Futures

A future is a contract to buy or sell the underlying asset for a specific price at a pre-
determined time. Through IIFLonline.com, you can now trade in index and stock futures on
the NSE. In futures trading, you take buy/sell positions in index or stock(s) contracts having a
longer contract period of up to 3 months. Trading in futures is simple! If, during the course of

15
 the contract life, the price moves in your favour (i.e. rises in case you have a buy position or
falls in case you have a sell position), you make a profit.

b) Options

An option is a contract, which gives the buyer the right to buy or sell shares at a specific
price, on or before a specific date. For this, the buyer has to pay to the seller some money,
which is called premium. There is no obligation on the buyer to complete the transaction if
the price is not favourable to him. To take the buy/sell position on index/stock options, you
have to place certain percentage of order value as margin. With options trading, you can
leverage on your trading limit by taking buy/sell positions much more than what you could
have taken in cash segment.

 Call Option has the Right but not the Obligation to Purchase the Underlying Asset at the
specified strike price by paying a premium, whereas the Seller of the Call has the obligation
of selling the Underlying Asset at the specified Strike price.
 Put Option has the Right but not the Obligation to Sell the Underlying Asset at the specified
strike price by paying a premium, whereas the Seller of the Put has the obligation of buying
the Underlying Asset at the specified Strike price.

By paying lesser amount of premium, you can create positions under OPTIONS and take
advantage of more trading opportunities.
Advantages of trading in derivatives:
1) Risk Management: In derivatives some financial risk can be transferred to other
parties who are more willing to take or manage the risk. Thus it can be useful tool for
risk management. Below are two risk management techniques
2) Hedging: It is taking equal or opposite positions in two different markets such as
buying in the cash segment and agreeing to sell in the derivative market or vice versa.
3) Arbitrage: It is a profit making market activity of buying and selling of same security
on different exchanges. Arbitrage as a practice is followed to take advantage of price
disparity.
4) Enhances Trading Limits: An option trading gives high exposure to a stock or
security by paying a small margin.
5) Time Leverage: It gives a time leverage of up to 3 months as against 1-3 days offered
in other margin products.

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III] Currency

Currency Derivatives has also emerged as an important and interesting new asset class for
investors. Currency options would provide an opportunity to take a view on exchange rate
and fulfil both investment and hedging objectives.

Advantages of Currency Derivatives:

 Trading hours of 09:00 am to 05:00 pm provide more trading opportunities

 Trade in prominent currencies like US Dollar, EURO, Pound, Yen against Indian
Rupee
 Real time and transparent currency rates in comparison to OTC rates
 No Counterparty Default risk due to settlement guarantee by regulated clearing house
 Low Taxation (No STT and CTT)
 Daily Cash Settlement in INR via MTM (Mark to Market)

IIFL online offers you a simple and convenient trading tips to trade and hedge your currency
risk in four pair of currencies - US Dollars (USD), Euro (EUR), Great Britain Pound (GBT)
and Japanese Yen (JPY). By offering you the choice of trading in different asset class of
currencies we offer you the opportunity to diversify your portfolio.

IIFL also offers advisory and brokerage services for the Indian currency derivative markets.
They provide online trading platform to clients that enable them to trade whenever they
choose while receiving instant professional support on where to invest. With IIFL’s powerful
expertise in financial services that exists across India, along with an enviable technological
edge, they are all set to bring to you the opportunity of investing in the rapidly growing
currency market. The currency derivatives market will be an added advantage to your
portfolio as it will help to manage your price risks and add to your investment avenues.

IV] Commodity
Commodity market is an essential constituent of the financial markets where a wide variety
of products, viz., precious metals, base metals, crude oil, energy, soft commodities and
agricultural produce are traded. Commodity trading help investors to hedge their commodity
risk, take speculative positions and explore arbitrage opportunities.

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 Commodity exchanges provide platforms to suit the varied needs of customers. Firstly, they
help in price discovery. Secondly, these exchanges allow users to hedge their price risk given
the uncertainty of the future. Thirdly, by involving the group of investors and speculators,
commodity exchanges provide liquidity and buoyancy to the system.

There are more than 20 recognised commodity future exchanges in India under the purview
of the Forwards Markets Commission (FMC). The four exchanges operating at the national
level are:

 Multi-Commodity Exchange (MCX)

 National Commodities & Derivatives Exchange (NCDEX)

 National Multi-Commodity Exchange (NMCE)

 Indian Commodity Exchange Ltd. (ICEX)

There are over 15 regional commodity exchanges in India. The leading regional exchange is
the National Board of Trade (NBOT) located at Indore. With the setting up of three multi-
commodity exchanges in the country, retail investors can now do commodity online trading
without holding physical stocks! IIFL aims at creating opportunities in commodities
investment by providing a simple and effective interface reflecting commodity market live
streaming, commodity rates, research and knowledge.

Benefits of investments in commodity futures:

 Leverage: As commodities future trading is done on margins and is less than that of the
equity market, it gives the investor greater leverage and thus the ability to generate higher
returns.

 Fewer manipulations: As commodities such as gold and silver are fundamentally global
commodities and their prices are highly correlated across the markets in assorted countries,
there are fewer manipulations.

 Diversification: There is better diversification as the returns from commodities market are
not directly associated to the price fluctuations in the equity or debt market.

 Inflation Hedge: As the commodity prices establish price levels and subsequently inflation,
investing in commodity futures can act as a hedge against inflation.

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V] Mutual Fund
A professionally managed investment fund collected from many investors for the purpose of
investing in securities such as stocks, bonds, money market instruments and similar assets.
Mutual funds have become popular investment vehicles offerings various kinds of schemes
with different investment objectives. Mutual fund investment is one of the safest, easiest and
convenient ways of making successful investments. IIFL provides a platform to invest in
mutual funds in a hassle-free, simple and convenient manner through its website
www.IIFLonline.com and through all its branches.

Benefits of Mutual Funds:

 Professional Management of funds

 No paper work
 Diversification of the portfolio
 Low cost of investment
 Highly liquid in nature
 Well regulated

As the process of selecting the right mutual fund may be complex and tedious, IIFL experts
have researched the funds and created a choice of funds.

You may choose to invest in the choice of funds suggested by the experts or may build your
own portfolio.

VI] Exchange Traded Funds

Exchange Traded Funds or ETFs are securities that are traded like individual stocks on an
exchange. Unlike regular open-end mutual funds, ETFs can be bought and sold throughout
the trading day like any stock.

The price of a mutual fund scheme is determined by its Net Asset Value (NAV) at the end of
a trading day. The price of an ETF fluctuates throughout the trading day as they are traded
during the trading hours on a stock exchange.

Most ETFs charge lower annual expenses than many mutual funds. As with stocks, one must
pay a brokerage to buy and sell ETF units.
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 You can buy and sell Gold, Index, Banking or International ETFs online through your IIFL
online account.

Benefits of ETFs:

 Flexibility to trade:As ETFs can be traded like individual stocks throughout the day on the
stock exchange, it provides liquidity to the customers.

 Lower Costs:ETF’s are listed on the stock exchange and generally have a less expense ratio
than most mutual funds

 Simple structure:ETFs are simple in structure and easy to understand.

 Tax Efficiency:ETFs generally generate relatively low capital gains because they typically
have low turnover of their portfolio securities.

 Diversification:Investments in ETFs are widely diversified as indices are construed to

represent performance of the stock market as a whole.

VII] Margin Funding

The funds that brokerages arrange to finance investors’ share purchases. This provides an
opportunity for investors to invest more than they could by using their own money and
increase the potential returns.

Benefits for Investors:

 Investors don’t have to sell their long term investments to encash their value. They can take
larger positions in the market by using shares they currently held in the portfolio

 Investors can increase their overall stock market investment with a moderately small amount
of their own money

 The ability to invest more while having limited cash on hand enables investors to take
advantage of timely market opportunities

 As margin funding enables to have more money, investor can spread the portfolio across a
variety of shares and securities. As a result of this diversification, investment risk of
investor’s portfolio gets reduced.

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VIII] IPO

An Initial Public offer (IPO) is the selling of securities to the public in the primary market. It
is when an unlisted company makes either a fresh issue of securities or an offer for sale of its
existing securities or both for the first time to the public. This paves way for listing and
trading of the issuer’s securities. The sale of securities can be either through book building or
through normal public issue.

IIFL also facilitate IPO applications for all its clients. You can apply for an IPO either online
by visiting www.IIFLonline.com or by filling up a physical form at any of our branches.
Upon allotment, shares will be credited to your Demat account.

IIFL facilitate Loan for applying in Primary Market Issues (IPOs & FPOs). With this
product, Investors can apply for IPOs by investing only Margin amount (specified for each
IPO separately).The facility is available for HNI as well as Retail clients to help in increasing
chances of allotment.

IX] NCDs / BONDs

A) NON-CONVERTIBLE DEBENTURES

Non-convertible debentures (NCDs) are debentures which cannot be converted into equities
or shares. As the convertibility feature is not attached to these debentures, they usually carry
higher interest rates than their convertible counterparts.

For those who are looking for the investment instrument that offers high returns with
moderate risk and giving the flexibility of choosing between short and long tenures, NCDs
might be the right choice.

An NCD can be secured or unsecured. Secured NCDs are backed by the issuer company's
assets to fulfil the debt obligation unlike unsecured NCDs. The NCD issues are rated by
credit rating agencies like CRISIL, ICRA, FITCH, and CARE to ensure the company's ability
to service the debt on time & lower default risk.

Benefits:

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 As NCD’s are listed on stock exchanges, they provide liquidity to holder

 The tenure of NCDs can be anywhere between 2 years and 20 years

 NCDs are rated by rating agencies such as CRISIL, ICRA and FITCH

 If you buy a NCD that pays interest then the interest will not attract TDS

 The debentures are generally offered in four options: monthly, quarterly, annual and
cumulative interest

B) BONDS

Fixed income products such as bank/company deposits and bonds are popular with risk
averse investors as they provide safety of capital with returns in the form of fixed periodic
payments and the eventual return of principal at maturity.

Most investors, regardless of age should have at least a small amount of their portfolio
allocated to fixed income products like bonds. This adds safety and consistency to a portfolio.

IIFL's online trading portal is a complete online investment destination that offers multi-asset
investment choices. Our advisory service adopts a holistic approach to portfolio building and
is qualified to advice on all major asset classes for investments. Our web portal allows you to
purchase NCDs/corporate bonds online. You can trade in any bond out of the scores of
corporate bonds that are traded daily on the stock exchange.

Features of Fixed income Products

1) Diversification: Investment in fixed income securities counterbalances high-risk investments
in a portfolio and serves to even out returns in times of volatility.

2) Fixed returns: They offer a potentially attractive and regular income avenue as the rate of
interest is fixed (in most cases but not all) till maturity.

3) YTM (Yield to Maturity): By investing in bonds and holding them till redemption, you can
earn maximum returns in the form of regular interest plus the face value amount on maturity.

4) Protect from volatility: While fixed income securities generally do not offer the high returns
potential of other investments, you are spared from the volatility common in other markets as its
price fluctuation is relatively lesser than equity stocks.

22
 5) Liquidity: Fixed income securities provide the flexibility and liquidity required to construct a
portfolio customized to your specific investment objective. If required, low-risk fixed income
instruments like government bonds can be sold at short notice.

6) Lower Risk: Fixed income securities represent a loan from investors. As these investors are
creditors to the company, in the eventuality of the company being winded down, they have priority
over shareholders.

Corporate FDs

Company fixed deposit is a deposit in company for a fixed rate of return over a fixed period
of time. The rate of interest is determined by the tenure of the deposit as well as other factors.
The deposit made in a company fixed deposit is governed by section 58A of the Companies
Act. Company fixed deposits are a good option for investment as they provide higher rate of
interest compared to bank deposits. They are good sources of regular income which may be
dispersed monthly, quarterly, half yearly or yearly interest incomes. However, as these
deposits are unsecured, in case of default by a company, the investor cannot sell the deposit
documents to recover his amount. The investor has no claim over the assets of the company
in case of winding up of the company. This makes Company Fixed Deposit a risky
investment option. Hence, performance of the company should be reviewed from time to time
and at the maturity of deposit, by analysing Balance Sheet & Share Prices movement. This
will be helpful in deciding whether the deposit should be renewed or not.

Benefits:

 Higher rates of interest.

 Flexible tenure ranging from 6 months to 7 years.

 No TDS in case the interest is only Rs. 5000 in one financial year.

 Nomination facility available.

 Regular interest incomes - monthly, quarterly, half-yearly, or yearly.

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 Competitors

I] Angel Broking

Incorporated in 1987, Angel Broking has become one of the most respected Stock-Broking
and Wealth Management Companies in India. They have built up a huge network of
Branches and Franchises (More than 900 cities and 8500 Franchises) thereby maintaining a
great support system for investors who prefer human interactions while trading. Alternatively
you can use their Trading platforms for the device of your choice be it the Web,
Smartphones, Tablets and Desktops. They have more than 10 lakh clients which trade with
them.

II] ICICI Direct

By far the biggest and best known full service stock broker in India. They have good service
and easy to use user interface. There brokerage varies from 0.55% to .20% depending on the
value of trades you do with them. There biggest selling point is there seamless integration
with your ICICI bank account which makes transfer/withdrawal of funds really easy and
quick. They also offer special product like valid till cancel and even T+90 trading in BSE
segment.

III] Motilal Oswal :

They are one of the oldest and most reputed brokers operating in India. They are also full
service brokers providing gamut of financial service to the customer. They are best known
for the advisory service provided by them. They have more than 8 lakh customer trading with
them.

IV] ShareKhan :

Incorporated in February 2000, Sharekhan is India’s 2nd largest stock broker as per number
of customers, providing brokerage services through its online trading website Sharekhan.com
and 1950 Share shops which includes branches & Franchises in more than 575 cities across
India. They are full service broker and provide various other services like asset management
etc.

24
V] HDFC Security:

They are one of the larger broking houses in India and with their bank branches, they have
one of the largest network after ICICI. They have a vast network of bank branch in smaller
towns too. Most of the investors who have a bank account end up opening a trading/Demat
account with them. They are good full service brokers providing all major services like
research desk, mutual fund investments and portfolio management services.

VI] Kotak Securities:

They are one more well know name in Financial services and with their bank branches in big
cities they are able to cater to a large number of urban clients. There online service is decent
but brokerage is not that competitive.

25
26
 Chapter 2 - FUNCTIONAL AREAS

I] Marketing

Marketing is essential for all forms of business, irrespective of their scale, sector or nature.

A. Market Positioning:

Market positioning statements of IIFL are “At IIFL we give you single window service” and
“We ensure your comfort”.

So, IIFL focuses on the consumers who prefer almost all investment activities at same place
by providing number of financial services. At IIFL a person can purchase or sell shares,
debentures etc., buy more shares against the existing shares on margin, convert physical
shares into a dematerialised form, and do a number of ancillary activities from a single
window. IIFL also provides other investment option to the same person at same place like
Mutual Fund, Insurance, Fixed Deposit, and Bonds etc. and help the person in designing his
portfolio. By this way IIFL provides comfort to its customers.

IIFL is also positioned according to Ries and Trout. IIFL is promoted as a no. 1 investment
product distributor and R & T agent of India.

Target Market:

The target market of IIFL is anyone who has the capacity to earn more than they spend.
Hence, IIFL has customers ranging from lower middle class income groups to HNIs (High
Networth Individuals)

B. Marketing channel System:

IIFL uses one level marketing channel for investment product distribution. Sub-brokers work
as intermediary between consumer and company. Company has both forward and backward
flow of activity through channel. Company distributes stationery, brokerage, and information
forward to its sub-broker. The sub-brokers send filled forms, queries, amount of investment
etc. back to the company.

C. Training Channel Members:

IIFL provides training to the sub-brokers because they will be viewed as the company by the
investors. The executives of IIFL explain various new schemes of investment to the sub-

27
brokers with its objective, risk factors and expected return. Company also periodically
arranges seminar to guide sub-brokers.

D. Advertising and Promotion: The objective of advertising of IIFL is to create awareness

about the firm as well as the different financial products and services that it offers. The
company doesn’t believe in giving advertisements in different forms of media like TV,
Newspapers, and Magazines etc. IIFL’s advertisement is made indirectly by the companies
associated with it. IIFL is R & T agent of around 700 companies. They publish name, address
and logo of IIFL on their annual report. IIFL also publishes its weekly Stock Market
Newsletter ‘Smart Trader’ to guide investors and sub-brokers about market. It also publishes
3 flagship reports, namely :-

 Wealth Maximiser – This is IIFL’s flagship report that suggests 10 equity stocks for
long terms positions in large cap companies.
 Value Invest – This flagship report suggests 10 equity stocks for long term positions
in mid cap companies.
 Value Invest – This is a technical report that suggests 10 stocks for holding a monthly
position in equity.

II] Human Resource

IIFL’s HR Department is located at its head office in Mumbai.

1. Recruitment and Selection Policy:

The upper level members like zonal managers, regional managers, branch managers and
senior executives are recruited by publishing recruitment advertisement in leading national
level newspaper. The qualified applicant are then called for interview and selected.

The regional manager has authority to select lower level employee like peon, marketing
executives, accountant etc. by approval of zonal manager.

2. Training and Development:

Continuous training and upgrading technical, behavioural and managerial skills is a way of
life in IIFL. IIFL encourages employees to hone their skills regularly to enable them to face
the challenges of the changing requirements of customers that fit market up and down.

28
Training needs analysis and study, which is done on a regular basis and systematic
methodologies are employed, that ensures the skills and capabilities of all employees are
constantly upgraded to enable them to perform in the challenging work environment.

New employees are trained in the following manner :-

 They are given class room training for 14 days to strenghthen their theoretical
knowledge and make them aware of all the rules, regulations and policies of IIFL as
well as the financial industry.
 They are then given 8 days of in-bound training wherein they are made familiar with
the terminals, computer softwares and related technology.
 After that, they are supposed to complete 7 day of on the job training. In this training,
they work under an experienced employee who mentors them and makes them work
ready.
 During this one month course of training, the new employees are supposed to give 4
exams, i.e. one every Friday. The syllabus of this exam is based on all that they learn
in the previous week.

All the existing employees have to give a 100 mark exam every Friday based on current
affairs, SEBI guidelines and other rules applicable in the financial industry.

3. Employee Motivation:

IIFL’s employees are highly empowered. IIFL tries to make sure that the job quality and the
job satisfaction is as per benchmarks.

Also, a lot of financial incentives are linked to various working variables like :-

 Number of inactive clients activated

 Number of transactions per day
 Amount of brokerage earned
 Number of new mutual fund investments created

Employees in IIFL’s Mumbai h/o are also given free fresh fruit juices and shakes, snacks as
well as tea and coffee. This gesture ensures that employees are not nutritionally deficient, and
hence are as productive as possible.

III] SALES

29
 In any business organization, sales is the department that generates revenue. No matter how
good your operation are, how cutting-edge your technology is, how tight your financial goals
are or how progressive and forward-thinking your management techniques are, you must still
have a sales mechanism in place for everything to function efficiently.

IV] OPERATIONS

In this firm, market operations is further split into:

 Global FX Operations (FX, Currency Options and Money Markets)
 Fixed Income (Bonds, Interest Rate Derivatives, and Credit Derivatives)
 Equities (Cash equities, Stock Borrowing and Lending, and Equity Derivatives)
 Cross Product Services (a utility group that performs recociliations, reporting, brokerage, for
all the asset classes)
 Client Clearing and Collateral Management.
 Securities Services (Custody and Asset Servicing).

Operations is a very interesting place to be in, and in a very large organization, it is incredibly
complex. At the end of the day, Operations is responsible for delivering value. While Sales
and Trading generate fees and creates a customer, it is operations that maintains the customer.
This is usually overlooked but buy-side clients will not direct more business to your firm if
your operations is not run well.

V] COMPLIANCE

Compliance is designed to ensure compliance with all applicable laws, rules and regulations.
Depending on the business of the financial institution, these duties may range from
monitoring trading activity, preventing conflicts of interest and ensuring compliance with
regulations at brokerage firms to preventing money laundering and potential tax evasion at
large banks.

As a firm's internal police force, the compliance department is unlikely to be the most
popular unit in a firm. However, a competent compliance department is of the utmost
importance in maintaining a firm's integrity and reputation.

30
 Compliance demands for most financial firms increased regulatory oversight significantly in
the wake of the 2008 credit crisis. This has led to increased demand for experienced
compliance staff.

Although compliance costs have spiralled higher in recent years, the costs of non-compliance
- even if inadvertent - can be far greater for a financial institution. Non-compliance may lead
to stiff monetary fines, legal and regulatory sanctions, and loss of reputation.

 Accounting

The Accounting and Finance function is concerned with the following:

 Financial record keeping of transactions involving monetary inflows or outflows.

 Preparing financial statements (the income statement, balance sheet and cash flow
statement) for reporting to external parties such as shareholders. The financial statements
are also the starting point for calculating any tax due on business profits.
 Payroll administration Paying wages and salaries and maintaining appropriate income tax
and national insurance records.
 Preparing management accounting information and analysis to help managers to plan,
control and make decisions.

31
 Chapter 3 - SWOT ANALYIS

I] Strengths

 Experienced, efficient and opportunist top level management.

 Vast database
 Low pricing in comparison to competitors
 IIFL brand value
 IIFL is one of the largest private sector financial institution
 It has successfully differentiated itself from its peers with its diversified network and
revamped distribution strategy.
 IIFL’s website, IIFLonline.com is one of the most popular website for online
transactions.
 IIFL has won many won many awards and gained recognition over the years.
 All branches are linked online, in real time allowing for efficient information
communication.

II] Weakness

 Customers unsatisfied with certain branches in tier II and tier III cities.
 Low awareness due to lack of advertisement
 Lack of loyal clientele
 Intense competition
 IIFL doesn’t have strong presence in rural areas
 Lacks in aggressive marketing strategies.
 Some of the product categories lack in performance and doesn’t have reach in the
market.
 Marginal International presence.

III] Opportunity

 Untapped Market, especially in rural areas where 65% of India’s population still
resides.
 Increasing spending power and standard of living of the Indian Middle Class.

32
  Increasing financial awareness.
 Constant growth is visible in Sensex and Nifty since the past few months and these
bullish trends are expected to continue.

IV] Threats

 Inability to capture the rural markets due to intense growth and competition from the
public sector.
 Lack of infrastructural facilities in the nation.
 Bearish trend in the stock markets.
 In recent times, India has witnessed entry of many international financial institutions,
which obviously pose a threat to IIFL.
 Lack of infrastructure in rural areas could constrain investments.
 Extension of operations overseas poses a lot of external threats

33
 Chapter 4 - Organisational Practices

Performance Appraisal System

 Provide frequent feedbacks

 Track employee goal achievements and progress
 Identify training needs for each employee
 Get reports and analytics
 Identify top and low performers
 Well informed decision making
 To be able to contribute towards company’s productivity
 Establishing standards and measures

A transparent and effective appraisal process improves employee-manager relationship,

fosters communication and boosts company culture. It makes an organization a great place to
work at.

Appraising

This stage involves documenting performance of employees through observing, recalling,

evaluating, written communication, judgment and analysis of data.

Some parameters for appraisal are:

 Quality of work (accuracy, thoroughness, effectiveness)

 Quantity of work (competence and efficiency of work regardless of volume. Neatness
and accuracy)
 Teamwork (establishes and maintains effective working relationship with others.
Shares information and resources with others. Follows instructions of supervisor and
respond to requests from others in the team in a helpful manner. Contributing work
and effort to group performance to meet agreed upon objectives and achieve team
success)
 Job knowledge (application of appropriate level of technical and procedural
knowledge in specific field. Degree of technical competence. Understanding of job

34
 procedures, methods, facts and information related to assignments. Perform duties
with minimal supervision but seek guidance where and when appropriate to the job,
consults the appropriate staff)

Feedback

After the formal appraisal stage, a feedback session is held. This session involves verbal
communication, listening, problem solving, negotiating, compromising, conflict resolution
and reaching consensus.

Some usual types of feedbacks are :-

a) Positive Feedback

- Reflects a high level of discipline and punctuality.

- Has got strong work ethics and sets an example with his perfect attendance. Is very
particular about the attendance of his team members as well, which contributes to the
productivity levels of the team, and the organization.

c) Negative Feedback

- Takes more breaks than permitted as per the office rules, which affects the working hours
leading to lesser productivity.

- The performance has gone down in the past few months. Realizing the efficiency displayed
in the past, the organization would help in every possible way to see productivity in the future
improves.

Board of Directors

 Mr. Niraml Jain (Chairman & Managing Director)

Mr. Nirmal Jain is the Chairman and Managing Director of the diversified financial
services IIFL group. Nirmal Jain (CP as he is better known in the Industry), has the
uncanny knack of staying ahead of the curve and the foresight to spot opportunities
that seem invisible on the horizon for the others. IIFL’s entire history is a case study
of turning adversity into opportunity. CP is a chartered accountant by qualification,

35
 whose entrepreneurial energy drove him to co-found IIFL in 1983 with a less-than-
modest capital of Rs 150,000.

 Mr. R. Venkataraman (Managing Director)

Mr. R. Venkataraman, Managing Director is a founder member of the IIFL Group. He
is a Fellow Member of the Institute of Chartered Accountants of India and has varied
experience in the field of financial services spanning over 30 odd years.
Venkataraman has helped position and build a strong brand for the group in the
registry and other financial services businesses

 Mr. Anand Tandon (Director)

Mr. Anand Tandon, Director, founder member of IIFL GROUP, is the orchestrator of
technology initiatives such as the call center in the service of the customer.
Mr. Tandon was a member of the Bombay Stock Exchange and has more than 30 years
of experience in the financial services arena.

MANAGEMENT TEAM
 Mr. V.Mahesh
Managing Director – IIFL Data Management
 Mr. V. Ganesh
CEO – IIFL Computershare
 Mr. Sushil Sinha
Wholetime Director - IIFL Comtrade
 Mr. P. B. Ramapriyan
Vice President & Head - Financial Product Distribution
 Mr. Rajiv R. Singh
Vice President & Business Head - IIFL Stock Broking Limited
 Mr. J. Ramaswamy
Group Head - Corporate Affairs
 Mr. Deepak Gupta
Group Head - HR
 Mr. G. Krishna Hari
Group Head – Finance

36
 Chapter 5 - Conclusion

Work Experience

The 2 month summer internship at IIFL comprised of a number of aspects covering both
theoretical as well as practical areas. I interned at IIFL’s Jaipur based head office, which has
an extremely effective training and development unit. This training and development unit
updates itself from time to time to ensure it is able to provide the employees of all levels as
well as the interns with the skills, capabilities and abilities that are required to be relevant in
the dynamic stock broking business.

Classroom Training

The first six days of the internship comprised of classroom training. The classroom consisted
of 5 interns. Our faculty for the classroom training, Mr. Rajesh Jain was an extremely
experienced person who was an employee of IIFL since the past 18 years.

In the classroom training, all the basic aspects of the Indian Stock Market, particularly BSE
and NSE were beautifully covered. Our schedule for these 6 days was as follows:-

Time Activity

9:00am – 1:00pm Class Room training

1:00pm – 2:00pm Lunch

2:00pm – 5:00pm Class Room training

5:00pm - 6:00pm MCQ Moodle Test (Alternate days)

One of the first things that Rajesh Sir taught us were the 3 principles of investing, which
were:-

1) Start Early
2) Invest Regularly
3) Invest for Long term.
The training and development department of IIFL has a well laid down programme for the
education and skill upgradation of interns. All the interns were given a book called
‘Essentials of Financial Management’ which consisted of a number of topics.

37
A few of the topics covered in the classroom training in brief are as follows:-

1) Importance of Investing in the Financial Markets.

- Time value of Money
- Financial Markets as a pathway to achieve financial goals
- Merits and limitations of Saving as well as investing.

2) Types of Markets
- Primary Markets
- Secondary Markets

3) Factors affecting the Markets

- Gross Domestic Product (GDP)
- Index for Industrial Production (IIP)
- Purchasing Managers Index (PMI)
- Inflation
- Interest Rates
- FII (Foreign Institutional Investment)
- FDI (Foreign Direct Investment)
4) Intermediaries in the Primary Markets
- Merchant Banker
- Underwriter
- Registrar
- Depository
- Credit Rating Agency
5) Intermediaries in the Secondary Markets
- Broker
- Custodian
- Depository
- Clearing Corporations
6) Investment Opportunities in the Indian Financial System
- Equity (Delivery and Intraday)
- Debt (Debentures and Bonds)

38
 - Fixed Deposits
- Insurance
- Gold
- Real Estate
- Mutual Funds, SIP (Systematic Investment Planning) etc.
7) Corporate Actions

The knowledge imparted to us was not only theoretical but also very practical.
Some practical concepts/facts that we were told were as follows :-

1) There are 46 mutual funds in India, but only 2 RTAs (Registering and
Transferring Agents). One is CAMS and the other is IIFL.
2) Details about the inception of BSE, its shortfalls, the need for SEBI and inception
of SEBI
3) Benefits, Importance of Dematerialisation of shares.
4) The 2 depositories of India – NSDL AND CDSL.
5) The basic taxes levied on equity and mutual funds.
6) The apex institutes for various financial and real estate sector of the economy.
Namely :
- SEBI – Stock Markets, Credit Rating Agency, Depository Participants etc.
- IRDA – Insurance
- IFRDA – Pension Funds
- RBI – Banking Sector’
- RERA – Real Estate
7) The complete process of buying and selling of shares in detail.
8) Mechanisms to decide price during IPO of shares
- Fixed Price Method
- Book Building Method
9) Pre-Market, Market and post market timings
10) T+2 Settlement Period
11) Average Brokerages :-
- Intraday : 0.05% (Includes shortselling)
- Delivery: 0.5% (Includes BTST)
12) Limits, Margins given to clients and basis of calculation.

39
 13) Usage of DIS (Delivery Instruction Slip), and the importance of POA and Non –
POA to DPs.
14) Process of Transmission (Transfer) of shares in case of death of a holder.

Tests

In the six day period of classroom training, we had to give 3 tests, i.e one test every alternate
day. The tests had a time duration of 15 minutes and comprised of 20 multiple choice
questions (MCQs) that were of 5 marks each. Hence, every test was for 100 marks and 60
was the pass percentage.

The syllabus of the test was the same as what had been taught in the class on the day of the
test as well as a day prior to the test. These tests were conducted on the ‘Zeus’ moodle system
that is especially built for IIFL.

These tests according to me were extremely useful as they ensured that we interns paid full
attention when the classes were in session. For the IIFL management, these tests are a way of
measuring both, the capability of their interns as well as the efficiency and effectiveness of
their course.

In Bound training

After the 6 day classroom training, I was shifted to the inbound training area which is again
managed by the training and development department of IIFL.

In the inbound training area, I was given a desk with a desktop and a 3cx softphone system.
Smita Maam, a member of the training team, asked me to study the ‘flagship research
reports’ of IIFL on the first day, learn the key facts and key companies from it, and explain
my understanding of the same to her orally.

The first IIFL flagship report that I studied in detail was the Wealth Maximiser.

WEALTH MAXIMISER

Wealth Maximizer is an investment product of IIFL Stock Broking Ltd formulated by their
Equity, Fundamental & Technical Research, based on Techno-Fundamental Analysis. It

40
enlists 10 stocks from the Large-cap stock universe. The purpose of these reports is to
advise clients about long term investments in large cap companies.

The stocks, the risks attached, as well as the reasons for investment are beautifully illustrated
in the Wealth Maximiser report. The language used in these reports is fairly simple, thereby
ensuring that even a layman can understand it. The stocks listed in the latest wealth were
carefully studied by me. Using my excel skills, I tried to analyse the % of return on different
companies in order to be able to analyse which stocks were capable of giving better returns,
and which were hardly able to overcome even the inflation rates. I did this research over a
number of days. An excel snapshot of the same has been attached below :-

As is clearly visible from the above snapshot, certain stocks like State Bank Of India (SBI),
Nestle and Maruti Suzuki are already on the pathway to achieving their respective target
prices.

Rajesh Sir made sure that I learnt all the aspects of these different companies in detail. I also
understood various concepts in detail while studying this report. Namely :_

1) Market Capitalisation
2) Importance of 52 week high/low
3) BETA , i.e an index that helps us in analysing the stock volatility in relation to market
volatility.
4) Shareholding Pattern ( Promoters, FII, DII, Others)
5) Ratios (EPS, P/E etc.)
Studying the wealth maximiser and all the 10 stocks listed in it took me 10 days. After that, I
next had to study the ‘Value Invest’.

41
 VALUE INVEST

The Value Invest lists 10 stocks of Mid Cap companies for long term investment. The process
of studying the Value invest was the same as Wealth Maximiser.

Hence, I did a research similar to the Wealth Maximiser for the Value Invest. A snapshot of
the same is attached below :

As can be seem from the snapshot above, 4 out of 10 mid cap companies were able to achieve
their respective long term target in a short term period itself. Studying the Value Invest took
me around 1 day. The language of the Value invest is fairly simple too, and it can be easily
understood.

VALUE MAX

The next report that I had to study was the ‘Value Max’. The Value Max is a flagship report
for clients interested in monthly investments. It’s a brief and technical report, not detailed like
the Wealth Maximiser and Value Invest.

Studying the Value Max taught me the importance of the concept of Stop Loss. Stop Loss
refers to the lower limit of the price band at which a person should sell of his shares (even if
its at a loss) to ensure he does not make further losses.

After studying the Value Max, it was now time for on-the-job training.

42
 On The Job Training

After completing my study of the flagship reports, it was now time for me to understand the
IIFL Zeus Customer Relation Manager (CRM) system, the terminal access and functions, the
3CX softphone system, as well as basic customer interaction.

I was given a number of audio clippings that helped me in understanding the level of
professionalism, etiquettes and knowledge required to deal with the customers. After listen to
the clippings, I was allotted the task of calling the inactive clients and trying to make them
active again. IIFL defines inactive clients as those who haven’t traded since the past 3
months.

I activated inactive clients for two days at the training and development unit. I was able to
activate around 6 clients in that period.

My schedule under Rajesh Sir was pretty hectic. It was as follows :-

Time Activity
8:30am – 9:00am News Reading and team discussion
9:00am-3:30pm Stock Market Dealings
3:30-4:30pm Lunch
4:30pm-5:30pm Post trade confirmation calls
5:30pm-6:30pm Doubt clearing and enhancement of knowledge.

Under Rajesh Sir’s team, I was able to convert 8 clients from inactive to active. Apart from
that, I was given the responsibility to cater to calls of the absent equity advisors and
effectively handle the clients.

Post Lunch, I was asked to do the post trade confirmation calls.

43
My experience of working at IIFL was truly enriching. The amount of knowledge that I got
here about the Indian Financial System as well as the stock market is overwhelming. Apart
from the technical and educational aspect, I also realised the importance of quite a few other
aspects like patience, sincerity, discipline, corporate culture etc.

One thing that amazed me the most was the positivity amongst the employees and especially
all those under Rajesh Sir’s team who were always ready to help and be there for each other.

In a span of 2 months, the amount of warmth, familiarity and love that I got from the fellow
employees as well as my heads is truly astounding.

Thanks to this wonderful internship, I cannot wait to join the financial corporate world and
make a mark for myself in the industry.

44
 References

http://www.moneycontrol.com

http://www.capitaline.com

http://www.sharekhan ltd.com

http://www.indiainfoline.com

http://www.icicidirect.com

http://www.karvy.com

45