A

PROJECT REPORT ON

ON

MUTUAL FUNDS IN THE MONEY MARKET FUND

WITH REFERENCE TO

ICICI BANK LIMITED

SUBMITTED BY

K. SINDUJA

H.T No. 151223672106

UNDER THE GUIDANCE OF

Dr. THIRUPATHI GADABOINA

Submitted to Osmania University

In Partial Fulfilment for the requirement for the award of the Degree of Master of
Business Administration

DEPARTMENT OF BUSINESS DEPARTMENT

RAJA BAHADUR VENKATA RAMA REDDY INSTITUTE OF TECHNOLOGY

(Affiliated to Osmania University)

Hanuman Tekdi, Abids, Hyderabad –
500001 (2023-2025)
 ABSTRACT

Different investment avenues are available to investors. Mutual funds also offer good
investment opportunities to the investors. Like all investments, they also carry certain
risks. The investors should compare the risks and expected yields after adjustment of tax
on various instruments while taking investment decisions. The investors may seek advice
from experts and consultants including agents and distributors of mutual funds schemes
while making investment decisions. With an objective to make the investors aware of
performance of mutual funds, an attempt has been made to provide information on the
comparison of tax saving funds of selected Asset Management Companies such as HDFC,
IDBI, KOTAK, SBI and ICICI which may help the investors in taking investment
decisions. The analysis is also compared with the calculations based on the Standard
deviation, Beta values, Correlation, Coefficient of determination, and also Sharpe ratio,
Treynors ratio, Jensen measures for the period 2018-23. This paper is carried out to find
out the returns of funds thereby studying the performance of the selected tax saving
schemes in the market. The investor invests the funds based on the returns, net asset value
and also the trend prevailing in the market.

KEYWORDS : Asset Management Companies, Performance, Tax saving schemes.

 TABLE OF CONTENTS

INDEX
S.No CHAPTER Page No
LIST OF TABLES i
LIST OF GRAPHS ii
1 CHAPTER – I 01 - 07
INTRODUCTION
STATEMENT OF THE PROBLEM
NEED FOR THE STUDY
SCOPE FOR THE STUDY
OBJECTIVES OF THE STUDY
RESEARCH METHODOLOGY
LIMITATIONS OF THE STUDY
2 CHAPTER – II 08 – 24
REVIEW OF LITERATURE
THEORETICAL FRAMEWORK
3 CHAPTER – III 25 - 37
INDUSTRY PROFILE

COMPANY PROFILE
4 CHAPTER – IV 38 - 54
DATA ANALYSIS &INTERPRATATION
5 CHAPTER – V 55 – 57
FINDINGS
CONCLUSION
SUGGESTIONS
BIBLIOGRAPHY 58
 LIST OF TABLES

PAGE
S.NO TABLE NAME
NO
4.1 Standard Deviation for HDFC Tax Saver 38
4.2 Standard Deviation for Bajaj Allianz Tax Shield 39
4.3 Standard Deviation for Reliance Tax Saving Fund 40
4.4 Standard Deviation for SBI Magnum Tax Gain 41
4.5 Standard Deviation for ICICI Prudential Tax Plan 42
4.6 Return vs. Risk estimeted of selected tax saving schemes 43
4.7 Return of Bajaj Allianz Tax Shield Vs Benchmark's Return 44
4.8 Return of HDFC Tax Saver Fund Vs Benchmark's Return 45
4.9 Return of Reliance Tax Saving Fund Vs Benchmark's Fund 46
4.10 Return of SBI Magnum Tax Gain Fund Vs Benchmark's Fund 47
4.11 Return of ICICI Prudential Tax Plan Vs Benchmark's Fund 48
4.12 Beta Calculation for Bajaj Allianz Tax Shield 49
4.13 Beta Calculation for HDFC Tax Saver 50
4.14 Beta Calculation for Reliance Tax Saving Fund 51
4.15 Beta Calculation for SBI Magnum Tax Gain 52
4.16 Beta Calculation for ICICI Prudential Tax Plan 53
4.17 Beta Values estimated of selected tax saving schemes 54

i
 LIST OF GRAPHS

PAGE
S.NO GRAPH NAME
NO
4.1 Standard Deviation for HDFC Tax Saver 38
4.2 Standard Deviation for Bajaj Allianz Tax Shield 39
4.3 Standard Deviation for Reliance Tax Saving Fund 40
4.4 Standard Deviation for SBI Magnum Tax Gain 41
4.5 Standard Deviation for ICICI Prudential Tax Plan 42
4.6 Return vs. Risk estimeted of selected tax saving schemes 43
4.7 Return of Bajaj Allianz Tax Shield Vs Benchmark's Return 44
4.8 Return of HDFC Tax Saver Fund Vs Benchmark's Return 45
4.9 Return of Reliance Tax Saving Fund Vs Benchmark's Fund 46
4.10 Return of SBI Magnum Tax Gain Fund Vs Benchmark's Fund 47
4.11 Return of ICICI Prudential Tax Plan Vs Benchmark's Fund 48
4.12 Beta Values estimated of selected tax saving schemes 54

ii
 CHAPTER – I

INTRODUCTION
 1.1 INTRODUCTION
The Indian financial system based on four basic components like Financial Market,
Financial Institutions, Financial Service, Financial Instruments. All are play important role
for smooth activities for the transfer of the funds and allocation of the funds. The main aim
of the Indian financial system is that providing the efficiently services to the capital
market. The Indian capital market has been increasing tremendously during the second
generation reforms. The first generation reforms started in 1991 the concept of LPG.
(Liberalization, privatization, Globalization).

Then after 1997 second generation reforms was started, still the it‟s going on, its include
reforms of industrial investment, reforms of fiscal policy, reforms of ex-imp policy,
reforms of public sector, reforms of financial sector, reforms of foreign investment through
the institutional investors, reforms banking sectors. The economic development model
adopted by India in the post independence era has been characterized by mixed economy
with the public sector playing a dominating role and the activities in private industrial
sector control measures emaciated form time to time. The last two decades have been a
phenomenal expansion in the geographical coverage and the financial spread of our
financial system.

The spared of the banking system has been a major factor in promoting financial
intermediation in the economy and in the growth of financial savings with progressive
liberalization of economic policies, there has been a rapid growth of capital market, money
market and financial services industry including merchant banking, leasing and venture
capital, leasing, hire purchasing. Consistent with the growth of financial sector and second
generation reforms its need to fruition of the financial sector. Its also need to providing the
efficient service to the investor mostly if the investors are supply small amount, in that
point of view the mutual fund play vital for better service to the small investors. The main
vision for the analysis for this study is to scrutinize the performance of five star rated
mutual funds, given the weight of risk, return, and assets under management, net assets
value, book value and price earnings ratio.

1
1.2 STATEMENT OF THE PROBLIEM

A The Indian capital market has been growing tremendously with the reforms in industry
policy, reforms in public and financial sector and new economic policies of liberalization,
deregulation and restructuring. The Indian economy has opened up and many
developments have been taking place in the Indian capital market and money market with
the help of the financial system and financial institution or intermediaries which faster
saving and channel them to their most efficient use.

The measurement of fund performance has been a topic of increased interest in both the
academic and practitioner communities for the last four decades. It is more so because of
growing scale of mutual theory. The investment environment is becoming increasingly
complex.

Markets for equity shares, debentures, bonds and other fixed income instruments; real
estate, derivatives and other assets have reached their maturity and are driven by latest up-
to-date information. A mutual fund is thus the ideal investment vehicle for today‟s
complex and modern financial scenario.

Concept of Mutual Fund:

Mutual fund is the pool of the money, based on the trust who invests the savings of a
number of investors who shares a common financial goal, like the capital appreciation and
dividend earning. The money thus collect is then invested in capital market instruments
such as shares, debenture, and foreign market. Investors invest money and get the units as
per the unit value which we called as NAV (net assets value). Mutual fund is the most
suitable investment for the common man as it offers an opportunity to invest in diversified
portfolio management, good research team, professionally managed Indian stock as well as
the foreign market, the main aim of the fund manager is to taking the scrip that have under
value and future will rising, then fund manager sell out the stock. Fund manager
concentration on risk – return trade off, where minimize the risk and maximize the return
through diversification of the portfolio. The most common features of the mutual fund unit
are low cost.

Mutual funds concept can be well understood with the following diagram Figure: 1.1
Concept of mutual fund

2
1.3 NEED FOR THE STUDY

Generally, most of the investors investing in mutual funds in order to avail tax benefits and
also to earn returns, in this connection they would park their funds in the tax saving
schemes. A study required to analyze the performance of selected tax saving schemes to
fulfill the objectives of the investors. Hence the study has been undertaken.

1.4 SCOPE OF THE STUDY

The study is all about understanding the customer‟s perception to the tax benefit in mutual
fund. The purpose of this study of performance evaluation of tax saving mutual funds by
taking five selected companies which are ICICI, HDFC, SBI, RELINCE and IDBI is to
employ the resources in such a manner as to afford for the investors combine benefits of
low risk, steady returns, high liquidity and capital appreciation through diversification and
expert management.

3
1.5 OBJECTIVES OF THE STUDY

The main objective of the study is to make investors aware of performance and provide
information on the comparison of tax saving funds of selected asset management
companies. The specific objectives are:

• To understand the organisation of mutual fund industry.

• To study performance evaluation measure using risk return models.
• To compare the performance of selected tax saving schemes in comparison with
market portfolio.
• To measure the comparative beta analysis of selected AMC.
• To offer suggestion based on the finding arrived from the study.

4
1.6 RESEARCH METHODOLOGY

The following research methodology has been adopted for assessing the performance of
tax saving funds of selected Asset Management Companies in the market.

Sources of data

The present study is purely based on secondary data. Top five ELSS schemes were as per
their AUM as on 30th June 2018. The sample ELSS schemes are HDFC Tax Saver, ICICI
Prudential Tax Plan, Kotak Tax Saver, SBI Magnum Tax Gain and IDBI MF Tax Saver
Fund. The data is collected from the fact sheets, reports, websites, magazines, books and
journals etc. are considered. The deviations are properly analyzed. For each of the scheme,
the risk ratios (Average return, Beta, Standard Deviation, Correlation, Coefficient of
Determination, Sharpe Ratio, Treynor‟s Ratio and Jensen Model) were also observed
carefully and correlated with the returns. Accordingly, proper findings were found out and
conclusions were drawn about the best performance scheme among all.

TOOLS FOR PERFORMANCE MEASURES

In this study, the tools used for the analysis are Standard Deviation, Beta, Correlation,
Coefficient of Determination, Treynor‟s Ratio, Sharp Ratio and Jensen Measure for a
period of 5 years from 2018 to 2023.

Average Mean: The most popular & widely used measure for representing the entire data
by one value is what most layman call an „average‟ & what the statistician call the
„arithmetic mean‟. It is obtained by adding together all the items & by dividing this total
by the number of items.

Where:
X = Average Mean
ΣX = Sum of the frequency
N = Total number of frequency.

5
Standard Deviation: The degree that a single value in a group of values varies from the
mean (average) of the distribution. Standard deviation is a statistical measure that uses past
performance of an investment or portfolio to determine the potential range of future
performance and assess the probability of that performance. Standard deviations can be
calculated for an individual security or for the entire portfolio.

Beta: It describes the relationship between the stock‟s return and the index returns. The
beta value may be interpreted in the following manner, „a 1% change in Nifty index would
cause a 1.042% (beta) change in the particular fund. It is the slope of characteristic
regression line. It signifies that a fund with a beta of more than 1 will rise more than the
market and also fall more than market.

Where,

n – Number of year

x – Returns of the index

y – Returns of the fund

6
1.7 LIMITATIONS OF THE STUDY

• The study was limited by the time constraint; hence extent to study is not possible.
• The study was limited to 5 companies only.
• The policy and application are applicable to the particular assessment year only.
• The analysis and interpretation purely based on the data collected from various
website. The accuracy of interpretation depends upon the accuracy of these data.
• The return from the mutual fund depends upon the returns of the securities
involved in the portfolio. The return from the market depends upon the efficiency
of the market and other various factor affecting the fund and economy as a whole.
So the researcher doesn‟t claim the 100% accuracy of the result conducted from
the study.

7
 CHAPTER - II
REVIEW OF LITERATURE
 2.1 REVIEW OF LITERATURE

Lin Mei Chen (2006) examined ternary sorts on Taiwanese mutual capital across special
investment horizons. The explanatory variables blanketed between the regression have
been NAV, Sales Rate, Expense Ratio, then Debit Charges. The taking care of confirmed
as incursive funds appear more attractive because of each short-term yet long-term
investments and up to expectation the fund's performance correlates negatively including
the price ratio or positively with the internet asset value.

Cheong Sing TNG (2007) reiterated as funds size then spending have a sizeable affect on
fund performance. In discipline according to keep away from a development bias, the non-
surviving retailers were additionally included within the sample. It was located to that
amount the sizeable savings outperformed the baby funds, however that the performance
about the sizeable funds used to be now not statistically giant because entire bearing
periods at 5%. Although the sizeable possessing had a ignoble rate ratio, the differences
within fee ratio were insignificant.

Redman Arnold L or Gullett Nell S (2007) examined the factors to that amount have an
impact on mutual possessing performance. They examined performance the usage of
portfolio characteristics, management-controlled variables, yet bind demand variables. The
effects contract as the F statistic because the 1997-2000 period was 25.7 together with an
R² concerning 0.45, then to that amount the revenue ratio, manager tenure, and number of
substance are no longer full-size variables. The education concludes so the fund's majority
or cost ratio were tremendous atop the discipline period.

John A. Haslem, H. Kent Baker, then David M. Smith (2007) usage an exploratory
method in conformity with pick out and evaluate the overall performance over domestic
equity savings among terms on administration expenses then price ratios. As of December
2003, the education covered 6,179 home equity possessing beside the Morning Star
database. The researchers chronic Sharpe Ratio then Jensen measures as much risk-
adjusted measures in imitation of check funds performance. The end result comes in
imitation of the ending so in that place is a coalition into the management fees yet the price
ratio then the overall performance concerning the funds.

8
Price yet overall performance regarding Javier Gil-bazo then Pablo ruiz-verdu between the
US mutual fund (2009) analyze the kin in the industry. The researchers decided the kin
into fund expenses then performance and the investor's sensitivity in accordance with
resources performance. The study concludes so so are bad relationships of the fund pre-fee
development or the costs charged in imitation of investors. It finds that higher capital
management execute higher tailor prices according to performance.

Jeroen Derwall then Kees Koedijk (2009) ancient an exploratory strategy in imitation of
consider the performance about socially accountable fixed-income funding funds. The
education measures the overall performance of socially accountable bonds then balanced
capital compared to standard funds. The researchers evaluated the funds records beyond
the CRSP U.S Mutual Fund database because of the period beyond 1987 in accordance
with 2003. The discipline concludes up to expectation socially responsible constant
income capital outperformed traditional possessing by way of more than 1.3% care of year.

Ishaq Hacini, Khadra Dahou yet Mohamed Benbouziane (2010) dimension the funding
patterns on every mutual capital registered together with the Jordan Securities Commission
(JSC) because of the period July 2000 in imitation of December 2009. The effects finish
up to expectation mutual possessing have a tendency in imitation of observe the want
portfolio among terms about the investment style. In terms about investment style, mutual
resources managers have a tendency in conformity with prefer little topee stocks, shares on
previous winners, or shares together with low book-to-market ratios.

Swaminathan.M (2012) set up the affinity into the funding bulk and the overall
performance of the systems. The internet asset value over 210 pattern programs, who
include each the masses zone (72 systems) or the private quarter (138 systems) among the
duration 2003-04 according to 2009-10, is empirically analyzed. The instruction concludes
to that amount the want returns themselves are no longer commonly distributed on the
years and as the system's overall performance is positively influenced by means of the size
of the investment.

Sweta Goel, Rahul Sharma or Mukta Mani (2012) evaluated the overall performance or
traits regarding open-ended mutual resources within India. To attain it goal, the researchers
considered risk-adjusted overall performance metrics, asset altar yet expense ratio because
the length April 2006 in conformity with March 2011. The learning uses a regression

9
mannequin in imitation of decide the kinship of performance-related traits then mutual
possessing performance. They located up to expectation mutual resources performance is
influenced through theirs characteristics. The instruction concludes that strong overall
performance is associated together with a paltry fee ratio and considerable commodity
quantity concerning the mutual funds.

Venkatesh Kumar.N yet Ashwini Kumar. B.J. (2012) supplied a bibliographic overview
over demand yet fund-related characteristics because the overall performance concerning
funding funds. The decrial indicates up to expectation the Sharpe, Treynor, Jensen, Fama
& French three-factor mannequin yet the Carhart model are back in accordance with
pardon resources performance. The education concludes that close lookup yet research
have targeted on equity, article yet equalization resources then no particular tries have
been done in conformity with apprehend the determinants of tax savings capital
performance.

Gjergji cici or Scott Gibson (2012) check the overall performance concerning mutual
savings because of US corporate bonds based of shares then returns at protection levels.
The discipline analyzed a sample concerning 2,268 US pension resources from the
Morningstar database beside January 1996 according to December 2006. The researchers
rated the resources primarily based about bind determination ability, attribute timing
ability, average style, transaction costs, then the kind of the net return. The results
confirmed so much the prices on actively managing the savings greatness the benefits.

Yong Pui See then Ruzita Jusoh (2012) evaluate the performance regarding Malaysian
investment savings primarily based on savings characteristics. The capital traits analyzed
of the study are risk, funds size, administration virtue ratio, turn ratio then resources age.
The study aged sixty nine Malaysian fairness fund upstairs a five-year period. The
researchers aged regression analysis according to test the impact on capital characteristics
concerning funds performance. The education shows so capital greatness or turnover ratios
hold no widespread relation along savings performance. Fund managers must apprehend
the traits as have an effect on fund overall performance then improve strategies after
expand their possessing performance.

10
Nanjibhai Ranparia.D (2013) analyzed the literature in imitation of perceive the overall
performance symptoms of mutual funds. The researcher recognized subsistence on
performance, turnover, price ratio, asset size, loading fee, investment style, savings
supervisor or possession structure as like accomplishment overall performance indicators
influencing mutual possessing performance. The lesson terminated so each overall
performance indicator independently influences the mutual fund's return.

Abhay Kaushik, Douglas E. Brinckman, and Clarence C. Rose (2013) assessed the
performance about 1,374 actively managed US fairness mutual fund because of the
duration beyond 2000 after 2011. The researcher measures mutual possessing overall
performance based regarding excess returns. In the study, fund together with the
auspicious performance are identified as “winners” or resources with the measly
performance as much “losers”. The consequences complete so large-cap funds obtain
auspicious returns compared in imitation of common funds.

11
 2.2 THEORETICAL FRAMEWORK

Growth of Mutual Fund Industry

The history of mutual funds dates support to 19th century when it was introduced in
Europe, in particular, Great Britain. Robert Fleming set up in 1868 the first investment
trust called Foreign and colonial investment trust which promised to manage the finances
of the moneyed classes of Scotland by scattering the investment over a number of different
stocks. This investment trust and other investment trusts which were afterward set up in
Britain and the U.S., resembled today‟s close – ended mutual funds. The first mutual fund
in the U.S., Massachusetts investor‟s trust, was set up in March 1924. This was the open –
ended mutual fund.

The stock market crash in 1929, the Great Depression, and the outbreak of the Second
World War slackened the pace of growth of the mutual fund industry.

Innovations in products and services increased the popularity of mutual funds in the 1950s
and 1960s. The first international stock mutual fund was introduced in the US in 1940. In
1976, the first tax – exempt municipal bond funds emerged and in 1979, the first money
market mutual funds were created. The latest additions are the international bond fund in
1986 arm funds in 1990. This industry witnessed substantial growth in the eighties and
nineties when there was a significant increase in the number of mutual funds, schemes,
assets, and shareholders. In the US the mutual fund industry registered s ten – fold growth
the eighties. Since 1996, mutual fund assets have exceeds bank deposits. The mutual fund
industry and the banking industry virtually rival each other in size.

ORGANISATION OF A MUTUAL FUND

There are many entities involved and the diagram below illustrates the organisational set
up of a mutual fund

12
 Figure:Organisation structure of mutual fund

Mutual funds have a unique structure not shared with other entities such as companies of
firms. It is important for employees & agents to be aware of the special nature of this
structure, because it determines the rights & responsibilities of the fund‟s constituents viz.,
sponsors, trustees, custodians, transfer agents & of course, the fund & the Asset
Management Company(AMC) the legal structure also drives the inter-relationships
between these constituents.

The structure of the mutual fund India is governed by the SEBI (Mutual Funds)
regulations, 1996. These regulations make it mandatory for mutual funds to have a
structure of sponsor, trustee, AMC, custodian. The sponsor is the promoter of the mutual
fund,& appoints the trustees. The trustees are responsible to the investors in the mutual
fund, & appoint the AMC for managing the investment portfolio. The AMC is the business
face of the mutual fund, as it manages all affairs of the mutual fund. The mutual fund &
the AMC have to be registered with SEBI. Custodian, who is also registered with SEBI,
holds the securities of various schemes of the fund in its custody.

Sponsor:- The sponsor is the promoter of the mutual fund. The sponsor establishes the
Mutual fund & registers the same with SEBI. He appoints the trustees, Custodians & the
AMC with prior approval of SEBI, & in accordance with SEBI regulations. He must have
at least five year track record of business interest in the financial markets. Sponsor must
have been profit making in at least three of the above five years. He must contribute at
least 40% of the capital of the AMC.

13
Trustees:- The Mutual Fund may be managed by a Board of trustees a of individuals, or a
trust company – a corporate body. Most of the funds in India are managed by board of
trustees. While the board of trustees is governed by the provisions of the Indian trust act,
where the trustee is the corporate body, it would also be required to comply with the
provisions of the companies act, 1956. the board of trustee company, as an independent
body, act as protector of the unit-holders interest. The trustees don‟t directly manage the
portfolio of securities. For this specialist function, they appoint an AMC. They ensure that
the fund is managed by AMC as per the defined objectives & in accordance with the trust
deed & SEBI regulations. The trust is created through a document called the trust deed i.e.,
executed by the fund sponsor in favor of the trustees. The trust deed is required to be
stamped as registered under the provision of the Indian registration act & registered with
SEBI. The trustees begin the primary guardians of the unit-holders funds & assets, a
trustee has to be a person of high repute & integrity.

Asset Management Company (AMC):- The role of an Asset management companies is

to act as the investment manager of the trust. They are the ones who manage money of
investors. An AMC takes decisions, compensates investors through dividends, maintains
proper accounting & information for pricing of units, calculates the NAV, & provides
information on listed schemes. It also exercises due diligence on investments & submits
quarterly reports to the trustees. AMCs have been set up in various countries
internationally as an answer to the global problem of bad loans. Bad loans are essentially
of two types: bad loans generated out of the usual banking operations or bad lending, and
bad loans which emanate out of a systematic banking crisis. It is in the latter case that
banking regulators or governments try to bail out the banking system of a systematic
accumulation of bad loans which acts as a drag on their liquidity, balance sheets and
generally the health of banking. So, the idea of AMCs or ARCs is not to bail out banks, but
to bail out the banking system itself.

Types of AMCs in Indian Context

The following are the various types of AMCs we have in India.

• AMCs owned by banks.

• AMCs owned by financial institutions.
• AMCs owned by Indian private sector companies.

14
 • AMCs owned by foreign institutional investors.
• AMCs owned by Indian & foreign sponsors.
Custodian:- Often an independent organization, it takes custody all securities & other
assets of mutual fund. Its responsibilities include receipt & delivery of securities collecting
income-distributing dividends, safekeeping of the unit & segregating assets & settlements
between schemes. Mutual fund is managed either trust company board of trustees. Board
of trustees & trust are governed by provisions of Indian trust act. If trustee is a company, it
is also subject Indian Company Act. Trustees appoint AMC in consultation with the
sponsors & according to SEBI regulation. All mutual fund schemes floated by AMC have
to be approved by trustees. Trustees review & ensure that net worth of the company is
according to stipulated norms, every quarter. Though the trust is the mutual fund, the AMC
is its operational face. The AMC is the first functionary to be appointed, & is involved in
appointment of all other functionaries. The AMC structures the mutual fund products,
markets them & mobilizes fund, manages the funds & services to the investors. A draft
offer document is to be prepared at the time of launching the fund. Typically, it pre-
specifies investment objectives of the fund, the risk associated, the cost involved in the
process & the broad rules to enter & to exit from the fund & other areas of operation. In
India as in most countries, these sponsors need approval from a regulator, SEBI in our
case. SEBI looks at track records of the sponsor & its financial strength granting approval
to the fund for commencing operations. A sponsor then hires an asset management
company to invest the funds according to the investment objective. It also hires another
entity to be the custodian of the assets of the fund & perhaps the third one to handle
registry work for the unit holder of the fund.

Registrars & Transfer Agent (R & T Agent):- The Registrars & Transfer Agents(R & T
Agents) are responsible for the investor servicing function, as they maintain the records of
investors in mutual funds. They process investor applications; record details provide by the
investors on application forms; send out to investors details regarding their investment in
the mutual fund; send out periodical information on the performance of the mutual fund;
process dividend payout to investor; incorporate changes in information as communicated
by investors; & keep the investor record up-to-date, by recording new investors &
removing investors who have withdrawn their funds.

15
Concept of Mutual Fund:

Mutual fund is the pool of the money, based on the trust who invests the savings of a
number of investors who shares a common financial goal, like the capital appreciation and
dividend earning. The money thus collect is then invested in capital market instruments
such as shares, debenture, and foreign market. Investors invest money and get the units as
per the unit value which we called as NAV (net assets value). Mutual fund is the most
suitable investment for the common man as it offers an opportunity to invest in diversified
portfolio management, good research team, professionally managed Indian stock as well as
the foreign market, the main aim of the fund manager is to taking the scrip that have under
value and future will rising, then fund manager sell out the stock. Fund manager
concentration on risk – return trade off, where minimize the risk and maximize the return
through diversification of the portfolio. The most common features of the mutual fund unit
are low cost.

Mutual funds concept can be well understood with the following diagram Figure: 1.1
Concept of mutual fund

Growth of Mutual Fund Industry

The history of mutual funds dates support to 19th century when it was introduced in
Europe, in particular, Great Britain. Robert Fleming set up in 1868 the first investment
trust called Foreign and colonial investment trust which promised to manage the finances
of the moneyed classes of Scotland by scattering the investment over a number of different

16
stocks. This investment trust and other investment trusts which were afterward set up in
Britain and the U.S., resembled today‟s close – ended mutual funds. The first mutual fund
in the U.S., Massachusetts investor‟s trust, was set up in March 1924. This was the open –
ended mutual fund.

The stock market crash in 1929, the Great Depression, and the outbreak of the Second
World War slackened the pace of growth of the mutual fund industry.

Innovations in products and services increased the popularity of mutual funds in the 1950s
and 1960s. The first international stock mutual fund was introduced in the US in 1940. In
1976, the first tax – exempt municipal bond funds emerged and in 1979, the first money
market mutual funds were created. The latest additions are the international bond fund in
1986 arm funds in 1990. This industry witnessed substantial growth in the eighties and
nineties when there was a significant increase in the number of mutual funds, schemes,
assets, and shareholders. In the US the mutual fund industry registered s ten – fold growth
the eighties. Since 1996, mutual fund assets have exceeds bank deposits. The mutual fund
industry and the banking industry virtually rival each other in size.

TYPES OF MUTUAL FUND SCHEMES

1) By Structure

Open-ended Funds: An open-end fund is one that is available for subscription all through
the year. These do not have a fixed maturity. Investors can conveniently buy and sell units
at Net Asset Value ("NAV") related prices. The key feature of open-end schemes is
liquidity.

Closed ended Funds: A closed-end fund has a stipulated maturity period which generally
ranging from 3 to 15 years. The fund is open for subscription only during a specified
period. Investors can invest in the scheme at the time of the initial public issue and
thereafter they can buy or sell the units of the scheme on the stock exchanges where they
are listed. In order to provide an exit route to the investors, some close-ended funds give
an option of selling back the units to the Mutual Fund through periodic repurchase at NAV
related prices. SEBI Regulations stipulate that at least one of the two exit routes is
provided to the investor.

17
Interval Funds: Interval funds combine the features of open-ended and close-ended
schemes. They are open for sale or redemption during pre-determined intervals at NAV
related prices

2) By Investment Objective

Growth Funds: The aim of growth funds is to provide capital appreciation over the
medium to long term. Such schemes normally invest a majority of their corpus in equities.
It has been proved that returns from stocks, have outperformed most other kind of
investments held over the long term. Growth schemes are ideal for investors having a long
term outlook seeking growth over a period of time.

Income Funds: The aim of income funds is to provide regular and steady income to
investors. Such schemes generally invest in fixed income securities such as bonds,
corporate debentures and Government securities. Income Funds are ideal for capital
stability and regular income.

Balanced Fund: The aim of balanced funds is to provide both growth and regular income
as such schemes invest both in equities and fixed income securities in the proportion
indicated in their offer documents. These are appropriate for investors looking for
moderate growth. They generally invest 40-60% in equity and debt instruments. These
funds are also affected because of fluctuations in share prices in the stock markets.
However, NAVs of such funds are likely to be less volatile compared to pure equity funds.

Money Market Funds: The aim of money market funds is to provide easy liquidity,
preservation of capital and moderate income. These schemes generally invest in safer
short-term instruments such as treasury bills, certificates of deposit, commercial paper and
inter-bank call money. Returns on these schemes may fluctuate depending upon the
interest rates prevailing in the market. These are ideal for Corporate and individual
investors as a means to park their surplus funds for short periods.

3) Other Schemes

Tax Saving Schemes: These schemes offer tax rebates to the investors under specific
provisions of the Indian Income Tax laws as the Government offers tax incentives for
investment in specified avenues. Investments made in Equity Linked Savings Schemes

18
(ELSS) and Pension Schemes are allowed as deduction u/s 80C of the Income Tax Act,
1961. The Act also provides opportunities to investors to save capital gains u/s 54EA and
54EB by investing in Mutual Funds.

Gilt Fund: These funds invest exclusively in government securities. Government

securities have no default risk. NAVs of these schemes also fluctuate due to change in
interest rates and other economic factors as is the case with income or debt oriented
schemes.

SPECIAL SCHEMES

Industry Specific Schemes: Industry Specific Schemes invest only in the industries
specified in the offer document. The investment of these funds is limited to specific
industries like InfoTech, FMCG, and Pharmaceuticals etc.

Sectoral Schemes: Sectoral Funds are those which invest exclusively in a specified sector.
This could be an industry or a group of industries or various segments such as 'A' Group
shares or initial public offerings.

Index Schemes : Index Funds attempt to replicate the performance of a particular index
such as the BSE Sensex or the NSE 50.

TAX PLANNING AND MUTUAL FUND

Investors in India have option for the tax-saving mutual fund schemes for the simple
reason that it helps them to save money. The tax-saving mutual funds or the equity-linked
savings schemes (ELSS) receive certain tax exemptions under Section 88 of the Income
Tax Act. That is one of the reasons why the investors in India add the tax-saving mutual
fund schemes to their portfolio. The tax-saving mutual fund schemes are one of the
important types of mutual funds in India that investors can option for. There are several
companies in India that offer tax saving mutual fund schemes in the country.

While planning our investments we spend a considerable amount of time evaluating

various options and determining which suits us the best. But when it comes to planning out
investments from a tax saving perspective, more often than not, we simply go the
traditional way and do the exact same thing that we did in the earlier years. Well, in case

19
you were not aware the guidelines governing such investments are a lot different this year
and lethargy on your part to rework your investment plan could cost you dear.

TAX SAVING SCHEME

Equity Linked Saving Schemes (ELSS): Equity Linked Saving Scheme (ELSS) is also a
type of mutual fund and falls under the Equity Mutual Fund category. As the name
indicates, ELSS mutual fund invests major portion of its corpus into equity and equity
related instruments. But there are some distinct features which makes ELSS plans different
from other equity mutual funds.

Investments made in ELSS plans are eligible for deduction from the taxable income under
Section 80C of the Income Tax Act. There is no limit for investments in ELSS plans, but
investments of upto Rs 1,00,000 qualify for income tax benefits. Investments made in
normal mutual funds (other than ELSS plans) do not qualify for income tax deduction.

Features of an ELSS Plan

• ELSS is an equity linked tax saving investment instrument.

• Money collected under ELSS plan is mainly invested in equity and equity related
instruments.
• This financial product is more suited to those investors who are willing to take high
risk and looking for high returns.
• There is no upper limit on investments that can be made in ELSS. However
investments upto INR 1,00,000 made in ELSS in a financial year qualify for
deduction from taxable income under Section 80C of the Income Tax Act.
• ELSS comes with a 3 year lock in period.
• Long term capital gains earned on investments from ELSS are tax free.
• Also dividends earned from ELSS plan are tax free in the hands of the investor.
SWOT ANALYSIS

SWOT Analysis presents the information about external and internal environment of
mutual fund in structured from where by key external opportunity and threats can be
compared systematically with internal capabilities and weakness. The basic objectives of
SWOT analysis is provide a framework to reflect on the industry capabilities to avail
opportunities or to overcome thrats presented by environment.

20
 Strength Weakness
Full benefit of diversification Lesser return compared to equity
Tax benefit Poor technology & service level
Transparency & flexibility Lack of proper marketing
Expert investment management
Opportunity Threats
Government policies & Tax
concession Arrival of more private & foreign players

Introduction of more debt instrument in

Setting up a specific fund market.
Technology development

ADVANTAGES OF INVESTING IN MUTUAL FUNDS

There are several that can be attributed to the growing popularities and suitability of
mutual funds as an investment vehicle especially for retail investors.

a) Professional management: Mutual funds provide the services of experienced and

skilled professionals, backed by a dedicated investment research team that analysis
the performance and prospects of companies and selects suitable investments to
achieve the objectives of the scheme.
b) Diversification: Mutual funds invest in a number of companies across a broad
cross- section of industries and sectors. This diversification reduces the risk
because seldom do all stocks decline at the sane time and in the same proportion.
You achieve this diversification through a mutual fund with far less money than
you can do on your own.
c) Convenient administration: Investing in a mutual fund reduces paperwork and
helps you avoid many problems such as bad deliveries, delayed payment and
follow up with brokers and companies. Mutual funds save your time and make
investing easy and convenient.
d) Return potential: Over a medium to long term, mutual funds have the potential to
provide a higher return as they invest in a diversified basket of selected securities.
e) Low costs: Mutual funds are a relatively less expensive way to invest compared to
directly investing in the capital markets because the benefits of scale in brokerage,
custodial and other fees translate into lower costs for investors.

21
 f) Liquidity: In open ended schemes, the investors get the money back promptly at
net asset value related prices from the mutual fund. In closed end schemes, the
units can be sold on a stock exchange at the prevailing market price or the investor
can avail of the facility of direct repurchase at NAV related prices by mutual fund.
g) Transparency: You get regular information on the value of your investment in
addition to disclosure on the specific investments made by your scheme, the
proportion invested in each class of assets and the fund manager‟s investment
strategy and outlook.
h) Flexibility: Through features such as regular investment plans, regular withdrawal
plans and dividend reinvestment plans, you can systematically invest or withdraw
funds according to your needs and convenience.
i) Affordability: Investors individually may lack sufficient funds to invest in high-
grade stocks. A mutual fund because of its large corpus allows even a small
investor to take the benefit of its investment strategy.
j) Choice of schemes: Mutual funds offer a family of schemes to suit your varying
needs over a lifetime.
k) Safety: Mutual Fund industry is part of a well-regulated investment environment
where the interests of the investors are protected by the regulator. All funds are
registered with SEBI and complete transparency is forced.

DISADVANTAGES OF INVESTING IN MUTUAL FUNDS

• No Guarantees :- No investment is risk free. If the entire stock market declines in

value, the value of mutual fund shares will go down as well, no matter how
balanced the portfolio.
• Dilution :- Although diversification reduces the amount of risk involved in
investing in mutual funds, it can also be a disadvantage due to dilution.
• Fees and Expenses :- Most mutual funds charge management and operating fees
that pay for the fund‟s management expenses (usually around 1.0% to 1.5% per
year for actively managed funds). In addition, some mutual funds charge high sales
commissions, and redemption fees.
• Management risk :- When we invest in a mutual fund, we depend on the fund's
manager to make the right decisions regarding the fund's portfolio. If the manager

22
 does not perform as well as we had hoped, we might not make as much money on
our investment as we expected.
• Taxes :- During a typical year, most actively managed mutual funds sell anywhere
from 20 to 70 percent of the securities in their portfolios. If our fund makes a profit
on its sales, we will pay taxes on the income we receive, even if we reinvest the
money made.

ASSOCIATION OF MUTUAL FUNDS IN INDIA

With the increase in mutual fund players in India, a need for mutual fund association in
India was generated to function as a non profit organisation. Association of Mutual Funds
in India (AMFI) was incorporated on 22nd August, 1995.

AMFI is a apex body of all Asset Management Companies (AMFI) which has been
registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes
are its members. It functions under the supervision and guidelines of its Board of
Directors.

Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a
professional and healthy market with ethical lines enhancing and maintaining standards. It
follows the principle of both protecting and promoting the interests of mutual funds as well
as their unit holder.

SEBI Guidelines for Mutual Funds

Securities and Exchange Board of India (SEBI) is a board (autonomous body) created by
the Government of India in 1988 and given statutory form in 1992 with the SEBI Act 1992
with its head office at Mumbai.

SEBI (MFs) Regulation 1993, defines Mutual Fund as follows; “Mutual fund means a fund
established in the form of a trust by a sponsor to raise money by the Trustees through the
sale of units to the public under one or more schemes for investing in Securities in
accordance with these Regulations”.

The sponsor has to register the mutual fund with SEBI.

23
 • To be eligible to be a sponsor, the body corporate should have a sound track record
and a general reputation of fairness and integrity in all his business transactions.
• The sponsor should hold at least 40% of the net worth of the AMC.
• A party which is not eligible to be a sponsor shall not hold 40% or more of the net
worth of the AMC.
• The sponsor has to appoint the trustees, the AMC and the custodian.
• The trust deed and the appointment of the trustees have to be approved by SEBI.
• An AMC or its officers or employees can not be appointed as trustees of the mutual
fund.
• At least two thirds of the business should be independent of the sponsor.
• Only an independent trustee can be appointed as a trustee of more than one mutual
fund, such appointment can be made only with the prior approval of the fund of
which the person is already acting as a trustees.
Recent Market Trends

India is at the first stage of a revolution that has already peaked in the U.S. The U.S. boasts
of an Asset base that is much higher than its bank deposits. In India, mutual fund assets are
not even 10% of the bank deposits, but this trend is beginning to change. Recent figures
indicate that in the first quarter of the current fiscal year mutual fund assets went up by
115% whereas bank deposits rose by only 17%.

Characteristics Banks Mutual Fund

Returns Low Better

Network High penetration Low but improving

Administrative exp. High Low

Liquidity At a cost Better
Risk Low Moderate
Quality of assets Not transparent Transparent

Minimum balance between

Interest calculation Everyday
10th & 30th of every month

Investment options Less More

24
 CHAPTER – III
INDUSTRY PROFILE
&
COMPANY PROFILE
 3.1 INDUSTRY PROFILE
As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently capitalised
and well-regulated. The financial and economic conditions in the country are far superior
to any other country in the world. Credit, market and liquidity risk studies suggest that
Indian banks are generally resilient and have withstood the global downturn well.
The Indian banking industry has recently witnessed the rollout of innovative banking
models like payments and small finance banks. In recent years India has also focused on
increasing its banking sector
reach, through various schemes
like the Pradhan Mantri Jan Dhan
Yojana and Post payment banks.
Schemes like these coupled with
major banking sector reforms like
digital payments, neo-banking, a
rise of Indian NBFCs and fintech
have significantly enhanced
India’s financial inclusion and
helped fuel the credit cycle in the
country.
Indian Fintech industry is estimated to be at US$ 150 billion by 2025. India has the 3rd
largest FinTech ecosystem globally. India is one of the fastest-growing Fintech markets in
the world. There are currently more than 2,000 DPIIT-recognized Financial Technology
(FinTech) businesses in India, and this number is rapidly increasing.
The digital payments system in India has evolved the most among 25 countries with
India’s Immediate Payment Service (IMPS) being the only system at level five in the
Faster Payments Innovation Index (FPII).* India’s Unified Payments Interface (UPI) has
also revolutionized real-time payments and strived to increase its global reach in recent
years.
MARKET SIZE
The Indian banking system consists of 12 public sector banks, 22 private sector banks, 46
foreign banks, 56 regional rural banks, 1485 urban cooperative banks and 96,000 rural
cooperative banks in addition to cooperative credit institutions. As of March 2023, the total
number of ATMs in India reached 14,74,548. Moreover, there are 1,21,894 on-site ATMs

25
and Cash Recycling Machines (CRMs) and 96,243 off-site ATMs and CRMs. Banks
added 2,796 ATMs in the first four months of FY23, against 1,486 in FY22 and 2,815 in
FY21. 100% of new bank account openings in rural India are being done digitally.
Bank assets across sectors increased significantly since 2020. In 2022-23, total assets in
the public and private banking sectors were US$ 1,553.57 billion and US$ 901.3 billion,
respectively. In 2022-23, assets of
public sector banks accounted for
59.24% of the total banking assets
(including public, private sector and
foreign banks).
Bank assets across sectors increased
significantly since 2020. In 2022-23,
total assets in the public and private
banking sectors were US$ 1,553.57
billion and US$ 901.3 billion,
respectively. In 2022-23, assets of
public sector banks accounted for
58.81% of the total banking assets (including public, private sector and foreign banks).
India's digital lending market witnessed a growth of CAGR 39.5% over a span of 10 years.
According to RBI’s Scheduled Banks’ Statement, deposits of all scheduled banks
collectively surged by a whopping Rs.1.98 lakh crore (US$ 24.32 billion) as on May 5,
2023, at a growth rate of 10.2%.
According to the BCG Banking Sector Roundup Report of 9M FY23, credit growth is
expected to hit 18.1% in 2022-23 which will be a double-digit growth in eight years. As of
November 4, 2022 bank credit stood at Rs. 129.26 lakh crore (US$ 1,585.09 billion).
Non-food bank credit registered a growth of 17.6% in November 2022 as compared with
7.1% a year ago on the back of robust credit demand from the segments such as services,
industry, personal, and agriculture and allied activities, according to RBI’s statement on
Sectoral Deployment of Bank Credit.

26
INVESTMENTS/DEVELOPMENTS
Key investments and developments in India’s banking industry include:
• According to data released by the National Payments Corporation of India (NPCI),
UPI transactions reached 10.241 billion until August 30th, 2023.
• In September 2023, Hitachi Payment Services launched India's first-ever UPI-ATM
with NPCI.
• In September 2023, the Reserve Bank of India is likely to bring in CBDC in the
call money market.
• In July 2023, Mahindra and Mahindra acquires minority stake in RBL Bank.
• In July 2023, State Bank of India to acquire 100% stake of SBI Capital in SBICAP
Ventures for US$ 85.25 million (Rs. 708 crore).
• In June 2023, State Bank of India to acquire entire 20% stake of SBI Capital
Markets in SBI Pension Funds.
• In April 2023, HDFC Bank to acquire 20% or more in Griha Pte subsidiary of
HDFC Investments.
• M&A activity with an India angle hit a record US$ 171 billion in 2022.
• In April 2022, IDFC to sell Mutual Fund Business to Bandhan-Financial Holdings
led Consortium for US$ 550.23 million (Rs. 4,500 crore).
• In March 2022, aggressive Axis Bank acquired Citi's India consumer business for
US$ 1.6 billion.
• In December 2022, HDFC Bank to buy 7.75% stake in fintech start-up Mintoak.
• As per report by Refinitiv, Domestic M&A activity saw record levels of activity in
2022 at US$ 119.2 billion, up 156.3% from 2021. Companies like HDFC Bank,
HDFC, Ambuja Cements, ACC, Adani Group Biocon, Mindtree, L&T Infotech,
AM/NS, Essar Ports were involved in M&A deals in 2022
• On June, 2022, the number of bank accounts—opened under the government’s
flagship financial inclusion drive ‘Pradhan Mantri Jan Dhan Yojana (PMJDY)’—
reached 45.60 crore and deposits in the Jan Dhan bank accounts totaled Rs. 1.68
trillion (US$ 21.56 billion).
• In April 2022, India’s largest private bank HDFC Bank announced a
transformational merger with HDFC Limited.

27
• On November 09, 2021, RBI announced the launch of its first global hackathon
'HARBINGER 2021 – Innovation for Transformation' with the theme ‘Smarter
Digital Payments’.
• In November 2021, Kotak Mahindra Bank announced that it has completed the
acquisition of a 9.98% stake in KFin Technologies for Rs. 310 crore (US$ 41.62
million).
• In October 2021, Indian Bank announced that it has acquired a 13.27% stake in the
proposed National Asset Reconstruction Company Ltd. (NARCL).
• In July 2021, Google Pay for Business has enabled small merchants to access credit
through tie-up with the digital lending platform for MSMEs—FlexiLoans.
• In February 2021, Axis Bank acquired a 9.9% share in the Max Bupa Health
Insurance Company for Rs. 90.8 crore (US$ 12.32 million).
• In December 2020, in response to the RBI’s cautionary message, the Digital
Lenders’ Association issued a revised code of conduct for digital lending.
• On November 6, 2020, WhatsApp started UPI payments service in India on
receiving the National Payments Corporation of India (NPCI) approval to ‘Go
Live’ on UPI in a graded manner.
• In October 2020, HDFC Bank and Apollo Hospitals partnered to launch the
‘HealthyLife Programme’, a holistic healthcare solution that makes healthy living
accessible and affordable on Apollo’s digital platform.
• In 2019, banking and financial services witnessed 32 M&A (merger and
acquisition) activities worth US$ 1.72 billion.
• In April 2020, Axis Bank acquired additional 29% stake in Max Life Insurance.
• In March 2020, State Bank of India (SBI), India’s largest lender, raised US$ 100
million in green bonds through private placement.
• In February 2020, the Cabinet Committee on Economic Affairs gave its approval
for continuation of the process of recapitalization of Regional Rural Banks (RRBs)
by providing minimum regulatory capital to RRBs for another year beyond 2020-
21 - till 2021-22 to those RRBs which are unable to maintain minimum Capital to
Risk weighted Assets Ratio (CRAR) of 9% as per the regulatory norms prescribed
by RBI.

28
GOVERNMENT INITIATIVES
• There are 50.18 crore beneficiaries banked till August 2023, under PMJDY.
• In September 2023, IREDA partners with banks to boost renewable energy projects
in India.
• In March 2023, India Post Payments Bank (IPPB), in collaboration with Airtel,
announced the launch of WhatsApp Banking Services for IPPB customers in Delhi.
• In October 2022, Prime Minister Mr. Narendra Modi inaugurated 75 Digital
Banking Units (DBUs) across 75 districts in India.
• In Union Budget 2023, a national financial information registry would be
constructed to serve as the central repository for financial and ancillary data.
• In Union Budget 2023, the KYC process will be streamlined by using a 'risk-based'
strategy rather than a 'one size fits all' approach.
• Number of Jan Dhan Yojana Bank accounts are over 486 million. Jan Dhan
Deposits grew by 20% YoY. There are deposits of over ~US$ 24.2 billion in
beneficiary accounts.
• National Asset reconstruction company (NARCL) will take over, 15 non-
performing loans (NPLs) worth Rs. 50,000 crore (US$ 6.70 billion) from the
banks.
• National payments corporation India (NPCI) has plans to launch UPI lite which
will provide offline UPI services for digital payments. Payments of up to Rs. 200
(US$ 2.67) can be made using this.
• In the Union budget of 2022-23 India has announced plans for a central bank
digital currency (CBDC) which will be possibly known as Digital Rupee.
• National Asset reconstruction company (NARCL) will take over, 15 Non-
performing loans (NPLs) worth Rs. 50,000 crore (US$ 6.70 billion) from the
banks.
• In November 2021, RBI launched the ‘RBI Retail Direct Scheme’ for retail
investors to increase retail participation in government securities.
• The RBI introduced new auto debit rules with a mandatory additional factor of
authentication (AFA), effective from October 01, 2021, to improve the safety and
security of card transactions, as part of its risk mitigation measures.
• In September 2021, Central Banks of India and Singapore announced to link their
digital payment systems by July 2022 to initiate instant and low-cost fund transfers.

29
• In August 2021, Prime Minister Mr. Narendra Modi launched e-RUPI, a person
and purpose-specific digital payment solution. e-RUPI is a QR code or SMS string-
based e-voucher that is sent to the beneficiary’s cell phone. Users of this one-time
payment mechanism will be able to redeem the voucher at the service provider
without the usage of a card, digital payments app, or internet banking access.
• As per Union Budget 2022-23, the government will disinvest IDBI Bank and
privatise two public sector banks.
• Government smoothly carried out consolidation, reducing the number of Public
Sector Banks by eight.
• In May 2022, Unified Payments Interface (UPI) recorded 5.95 billion transactions
worth Rs. 10.41 trillion (US$ 133.46 billion).
• According to the RBI, India’s foreign exchange reserves reached US$ 630.19
billion as of February 18, 2022.
• The number of transactions through immediate payment service (IMPS) reached
430.67 million and amounted to Rs. 3.70 trillion (US$ 49.75 billion) in October
2021.
• The RBI has launched a pilot to digitalize KCC lending in a bid for efficiency,
higher cost savings, and reduction of TAT. This is expected to transform the flow
of credit in the rural economy.
• The RBI has launched a pilot to digitalize KCC lending in a bid for efficiency,
higher cost savings, and reduction of TAT. This is expected to transform the flow
of credit in the rural economy
• As per the Union Budget 2023-24, the RBI has launched a pilot to digitalize Kisan
Credit Card (KCC) lending in a bid for efficiency, higher cost savings, and
reduction of TAT. This is expected to transform the flow of credit in the rural
economy.
• As per the Union Budget 2023-24, digital banking, digital payments and fintech
innovations have grown at a rapid pace in the country. Taking forward this agenda,
and to mark 75 years of our independence, it is proposed to set up 75 Digital
Banking Units in 75 districts of the country by Scheduled Commercial Banks.
• Additionally, the government proposed to introduce a digital rupee or a Central
Bank Digital Currency (CBDC) which would be issued by the RBI using
blockchain and other technologies.

30
 • The government also proposed to bring all the 150,000 post offices under the
digital banking core business to enable financial inclusion.
• As per the economic survey 2022-23, the permission by RBI to lending institutions
to grant a total moratorium of 6 (3+3) months in case of payment failure due
between 1st March 2020 to 31st August 2020, infusion of US$ 9.1 billion (Rs.
75,000 crore) for Non-Banking Financial Corporations (NBFCs), Housing Finance
Companies (HFCs) and Micro Finance Institutions (MFIs), among others, have
also contributed to the revival of the real estate sector. The permission by RBI to
lending institutions to grant a total moratorium of 6 (3+3) months in case of
payment failure due between 1st March 2020 to 31st August 2020, infusion of US$
9.1 billion (Rs. 75,000 crore) for Non-Banking Financial Corporations (NBFCs),
Housing Finance Companies (HFCs) and Micro Finance Institutions (MFIs),
among others, have also contributed to the revival of the real estate sector.

ROAD AHEAD
Enhanced spending on infrastructure, speedy implementation of projects and continuation
of reforms are expected to provide further impetus to growth in the banking sector. All
these factors suggest that India’s banking sector is poised for robust growth as rapidly
growing businesses will turn to banks for their credit needs. The advancement in
technology has brought mobile and internet banking services to the fore. The banking
sector is laying greater emphasis on providing improved services to their clients and
upgrading their technology infrastructure to enhance customer’s overall experience as well
as give banks a competitive edge.
In recent years India has experienced a rise in fintech and microfinancing. India’s digital
lending stood at US$ 75 billion in FY18 and is estimated to reach US$ 1 trillion by FY23
driven by the five-fold increase in digital disbursements. The Indian fintech market has
attracted US$ 29 billion in funding over 2,084 deals so far (January 2017-July 2022),
accounting for 14% of global funding and ranking second in terms of deal volume. By
2025, India's fintech market is expected to reach Rs. 6.2 trillion (US$ 83.48 billion).

31
 3.2 COMPANY PROFILE

ICICI BANK LIMITED

History

ICICI was formed in 1955 at the initiative of the World Bank, the Government of India
and representatives of Indian industry. The principal objective was to create a development
financial institution for providing medium-term and long-term project financing to Indian
businesses. Until the late 1980s, ICICI primarily focused its activities on project finance,
providing long-term funds to a variety of industrial projects. With the liberalization of the
financial sector in India in the 1990s, ICICI transformed its business from a development
financial institution offering only project finance to a diversified financial services
provider that, along with its subsidiaries and other group companies, offered a wide variety
of products and services. As India’s economy became more market-oriented and integrated
with the world economy, ICICI capitalized on the new opportunities to provide a wider
range of financial products and services to a broader spectrum of clients. ICICI Bank was
incorporated in 1994 as a part of the ICICI group. In 1999, ICICI became the first Indian
company and the first bank or financial institution from non-Japan Asia to be listed on the
New York Stock Exchange.

The issue of universal banking, which in the Indian context meant conversion of long-
term lending institutions such as ICICI into commercial banks, had been discussed at
length in the late 1990s. Conversion into a bank offered ICICI the ability to accept low-
cost demand deposits and offer a wider range of products and services, and greater
opportunities for earning non-fund based income in the form of banking fees and
commissions. After consideration of various corporate structuring alternatives in the
context of the emerging competitive scenario in the Indian banking industry, and the move
towards universal banking, the managements of ICICI and ICICI Bank formed the view
that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for
both entities, and would create the optimal legal structure for ICICI group's universal
banking strategy. The merger would enhance value for ICICI shareholders through the
merged entity's access to low-cost deposits, greater opportunities for earning fee-based
income and the ability to participate in the payments system and provide transaction-
banking services. The merger would enhance value for ICICI Bank shareholders through a

32
large capital base and scale of operations, seamless access to ICICI's strong corporate
relationships built up over five decades, entry into new business segments, higher market
share in various business segments, particularly fee-based services, and access to the vast
talent pool of ICICI and its subsidiaries.

In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger
of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial
Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was
approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of
Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and
the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's
financing and banking operations, both wholesale and retail, were integrated in a single
entity.

BOARD OF DIRECTORS

Mr. Girish Chandra Chaturvedi

Non-Executive (part-time) Chairman
..............................................
Mr. Hari L. Mundra
Independent Director
..............................................
Mr. S. Madhavan
Independent Director
..............................................
Mr. Sandeep Bakhshi,
Managing Director & CEO
..............................................
Ms. Neelam Dhawan
Independent Director
..............................................
Mr. Rakesh Jha,
Executive Director
..............................................
Mr. Radhakrishnan Nair

33
Independent Director
..............................................
Mr. Sandeep Batra,
Executive Director
..............................................
Mr. B. Sriram
Independent Director
..............................................
Mr. Uday Chitale
Independent Director
..............................................
Ms. Vibha Paul Rishi
Independent Director

Terms and conditions of appointment of Independent Directors

Familiarisation Programme for Independent Directors

Contact details of Key Managerial Personnel as required under Regulation 30 of SEBI

(Listing Obligations and Disclosure Requirements) Regulations, 2015

AWARDS - 2023

ICICI Bank has received three awards from Asian Banking and Finance, a Singapore-
based finance magazine. The Bank won awards in the following categories: 'India
Domestic Trade Finance Bank of the Year', 'Technology & Operations Initiative of the
Year, India' and 'India Domestic Foreign Exchange Bank of the Year'.

Asiamoney has adjudged ICICI Bank as India's 'Best Domestic Bank' for the second year
in a row. Asiamoney is a Hong-Kong based finance magazine from the Euromoney group
(a part of the London-based Daily Mail). The Bank has received this award for its Digital
initiatives, Wealth & Private Banking business and sustainability efforts.

ICICI Bank has emerged as the winner in the 'Best in Treasury and Working Capital'
category for SMEs in India. The Asset, a Hong Kong-based business magazine, organises
these awards.

34
ICICI Bank has received the award for 'Consistent Excellence' in a survey conducted by
Global Custodian, a London-based magazine that covers the International Securities
Services industry. The Bank was recognised for its securities services across 13 categories
including asset management, asset safety, risk management, relationship management and
use of technology.

ICICI Bank has ranked no. 1 in the 'Best Services' (Asian Banks) category for its Trade
Finance services, according to the 2023 Euromoney-Asiamoney Trade Finance Survey.
Asiamoney, a Hong-Kong based finance magazine, conducted the survey.

ICICI Bank has emerged as the 'Best Company to Work For in India' in the BFSI sector, as
per a survey conducted by Business Today magazine in association with an HR solutions
company. We stood third in the overall list of companies across 12 sectors. This is the
sixth time we have received the recognition in the last seven years.

ICICI Bank has received the BFSI In-House Team of the Year award at the Asian Legal
Business India Law Awards 2023, organised by the Asian Legal Business (ALB) a legal
news portal from the Thomson Reuters stable.

ICICI Bank has been recognised as the 'Best for Family Office Services in India' at the
Asiamoney Private Banking Awards 2023. Asiamoney is a Hong-Kong based monthly
magazine from the Daily Mail Group. This award programme recognises institutions that
help the region's high net-worth individuals and families to grow their wealth.

ICICI Bank has emerged as the 'Model Bank of the Year' at the Celent Model Bank
Awards 2023. Celent is a marquee American research and advisory firm with clients
across 70 countries. The 'Model Bank of the Year' is the top-honour at this reputed award
ceremony.

ICICI Bank has been recognised as the 'Best Retail Bank in India' by The Asian Banker, a
financial publication headquartered in Beijing. This is the 10th year in a row that the Bank
has won this award. The Bank has also emerged as the 'Most Recommended Retail Bank
in India' in a consumer survey which the publication conducted across 11 markets in Asia.

ICICI Bank has received two awards at DigiDhan Awards programme, organised by the
Ministry of Electronics and Information Technology (MeitY), Government of India. The

35
Bank has won 'Vishishth Puruskar' for achieving the highest volume of digital payment
transactions among private sector banks for financial year 2022-23. The Bank won the
'Utkarsha Puruskar' for achieving second highest percentage of digital payment
transactions among large and medium private sector banks for the same period.

ICICI Bank has emerged as the 'Company of the Year' for 2022 at The Economic Times
Awards for Corporate Excellence organised by The Economic Times, the country's largest
financial daily. These awards are considered a benchmark for excellence in India Inc. The
Bank was chosen by a 13-member jury headed by Mr. Amitabh Kant, former CEO of NITI
Aayog and the present G20 sherpa of India. Other members of the jury included top
corporate honchos and policymakers of the country. ICICI Bank has been honoured for its
"strong revenue growth through a pivot to retail leveraging and a robust digital strategy",
according to ET.

ICICI Bank has emerged as the 'Bank of the Year' for 2022-23 at the Business Today -
KPMG Best Banks Awards for the third year in a row. The award is the most prestigious
accolade given to an institution under the BT-KPMG Best Banks study. In addition, ICICI
Bank has won the award in the 'Best in Innovation' category for InstaBIZ, its Business
Banking application.

ICICI Bank has been recognised as the 'Best Retail Bank in India' by The Asian Banker, a
financial publication headquartered in Beijing. This is the 10th year in a row that the Bank
has won this award. The Bank has also emerged as the 'Most Recommended Retail Bank
in India' in a consumer survey, which the publication conducted across 11 markets in Asia.

ICICI Bank has received two awards at the DigiDhan Awards programme, organised by
the Ministry of Electronics and Information Technology (MeitY), Government of India.
The Bank won the 'Vishishth Puruskar' for achieving the highest volume of digital
payment transactions among private sector banks for the financial year 2022-23. The Bank
also won the 'Utkarsha Puruskar' for achieving the second highest percentage of digital
payment transactions among large and medium private sector banks for the same period.

ICICI Bank has emerged as the 'Company of the Year' for 2022 at The Economic Times
Awards for Corporate Excellence organised by The Economic Times, the country's largest
financial daily. These awards are considered a benchmark for excellence in India Inc. The
Bank was chosen by a 13-member jury headed by Mr. Amitabh Kant, former CEO of NITI

36
Aayog and the present G20 Sherpa of India. Other members of the jury included top
corporate honchos and policymakers of the country. ICICI Bank has been honoured for its
'strong revenue growth through a pivot to retail leveraging and a robust digital strategy',
according to ET.

ICICI Bank has emerged as the 'Bank of the Year' for 2022-23 at the Business Today -
KPMG Best Banks Awards for the third year in a row. The award is the most prestigious
accolade given to an institution under the BT-KPMG Best Banks study. In addition, ICICI
Bank has won the award under the 'Best in Innovation' category for InstaBIZ, the Bank's
business banking application.

VISION

The ICICI Bank Limited Company's vision statement outlines its strategic strategy for
thefuture and outlines the goals it has for itself. The ICICI Bank Limited's vision statement
is adocument that outlines the bank's objectives in order to support its management,
strategic,and overall decision-making processes

MISSION

A public document that outlines the beliefs and strategic goals of ICICI Bank Limited is
the bank's mission statement. The ICICI Bank Limited mission statement also outlines
theorganization's goals while highlighting the services and goods it provides. The mission
statement also describes the organization's operational goals for ICICI Bank Limited,
themethods used to accomplish those goals, the target clientele, and the geographical area
inwhich the business operates

37
 CHAPTER – IV
DATA ANALYSIS
&
INTERPRETATION
 4.1 DATA ANALYSIS & INTERPRATATION

Calculation Of Standard Deviation Of Selected Funds

1. HDFC Tax Saver

Table 4.1 Standard Deviation for HDFC Tax Saver

RETURN AVERAGE dy = (Y-Y) 2

YEAR dy
(Y) RETURN (Y)
2019-20 -51.55 15.58 -67.13 4506.4369
2020-21 99.07 15.58 83.49 6970.5801
2021-22 26.42 15.58 10.84 117.5056
2022-23 -22.62 15.58 -38.2 1459.24
2023-24 26.59 15.58 11.01 121.2201
Total 77.91 13174.9827
Graph 4.1: Standard Deviation for HDFC Tax Saver

=77.91/5
=15.58
∑dy2 = 13174.9827

=13174.92/4
=3293.73

Standard Deviation (S.D) = = 57.39

38
2. Bajaj Allianz Tax Shield

Table 4.2 Standard Deviation for Bajaj Allianz Tax Shield

AVERAGE d = (Y-
y 2
YEAR RETURN (Y) RETURN dy
Y)
(Y)
2019-20 -49.22 13.45 -62.67 3927.529
2020-21 78.81 13.45 65.36 4271.93
2021-22 23.47 13.45 10.02 100.4004
2022-23 -15.19 13.45 -28.64 820.2496
2023-24 29.38 13.45 15.93 253.7649
Total 67.25 9373.873

Graph 4.2 Standard Deviation for Bajaj Allianz Tax Shield

= 67.25/5
= 13.45
∑dy2= 9373.86

= 9373.86/4
= 2343.47

Standard Deviation (S.D) = = 48.41

39
3. Reliance Tax Saving Fund

Table 4.3 Standard Deviation for Reliance Tax Saving Fund

AVERAGE dy = (Y-Y) 2
YEAR RETURN (Y) dy
RETURN (Y)
2019-20 -52.35 14.79 -67.14 4507.78
2020-21 82.01 14.79 67.22 4518.528
2021-22 22.49 14.79 7.7 59.29
2022-23 -24.23 14.79 -39.02 1522.56
2023-24 46.05 14.79 31.26 977.1876
Total 73.97 11585.35

Graph 4.3 Standard Deviation for Reliance Tax Saving Fund

= 73.97/5
= 14.79
∑dy2 = 11585.35

= 11585.35/4
=2896.34

Standard Deviation (S.D) = = 53.82

40
 4. SBI Magnum Tax Gain

Table 4.4 Standard Deviation for SBI Magnum Tax Gain

AVERAGE dy = (Y-Y) 2
YEAR RETURN (Y) RETURN (Y) dy
2019-20 -54.86 11.06 -65.92 4345.446
2020-21 86.41 11.06 75.35 5677.623
2021-22 12.98 11.06 1.92 3.6864
2022-23 -23.5 11.06 -34.56 1194.394
2023-24 34.29 11.06 23.23 539.6329
Total 55.32 11760.78
Graph 4.4 Standard Deviation for SBI Magnum Tax Gain

= 55.32/5
= 11.06
∑dy2 = 11759.78

= 11759.78/4
= 2939.95

Standard Deviation (S.D) = = 54.22

41
5. ICICI Prudential Tax Plan
Table 4.5 Standard Deviation for ICICI Prudential Tax Plan

AVERAGE dy = (Y-Y) 2
YEAR RETURN (Y) dy
RETURN (Y)
2019-20 -56.03 18.75 -74.78 5592.048
2020-21 112 18.75 93.25 8695.563
2021-22 24.11 18.75 5.36 28.7296
2022-23 -23.96 18.75 -42.71 1824.144
2023-24 37.63 18.75 18.88 356.4544
Total 93.75 16496.94

Graph 4.5 Standard Deviation for ICICI Prudential Tax Plan

= 93.75/5
= 18.75
∑dy2= 16496.93

= 16496.93/4
= 4124.23

Standard Deviation (S.D) = = 64.22

42
Standard deviation and return of selected tax saving schemes
Table 4.6 Return vs. Risk estimeted of selected tax saving schemes

Fund Return Standard deviation

HDFC 15.58 57.39
Bajaj Allianz 13.45 48.41
Reliance 14.49 53.82
SBI 11.06 54.22
ICICI 18.75 64.22

Graph 4.6 Return vs. Risk estimeted of selected tax saving schemes

INTERPRETATION : From the table 4.6 shows that average return and standard
deviation details. From the table it can be seen that ICICI fund making highest average
return of 18.75% during the period. However it‟s also facing highest risk of 64.22 of all
the four funds. The SBI fund, HDFC fund, Bajaj Allianz funds and Relience fund are
making similar amount average return but risk is not much higier.

43
COMPARISION BETWEEN RETURNS OF FUND AND BENCHMARK
RETURNS

1. Bajaj Allianz Tax Shield

Table 4.7 Return of Bajaj Allianz Tax Shield Vs Benchmark's Return

Year Returns on fund (y) Returns on index(x)

2019-20 -49.22 -51.79
2020-21 78.81 75.76
2021-22 23.47 17.95
2022-23 -15.19 -24.62
2023-24 29.38 27.7

Graph 4.7 Return of Bajaj Allianz Tax Shield Vs Benchmark's Return

INTERPRETATION: From table 4.7 show that that the fund yielded 78.81% return
while index return is 75.76% in 2020 will be higher as compare to all year. In the year
2019 index return is -51.79% while fund return is -49.22% that shows fund will not
perform well.

44
2. HDFC Tax Saver

Table 4.8 Return of HDFC Tax Saver Fund Vs Benchmark's Return

Year Returns on fund (y) Returns on index(x)

2019-20 -51.55 -51.79
2020-21 99.07 75.76
2021-22 26.42 17.95
2022-23 -22.62 -24.62
2023-24 26.59 27.7

Graph 4.8 Return of HDFC Tax Saver Fund Vs Benchmark's Return

INTERPRETATION: From the table 4.8 it is found that the HDFC tax saver fund will be
performed well in 2021 which is 99.07% return of fund while index return is 75.76%.

45
3. Reliance Tax Saving Fund

Table 4.9 Return of Reliance Tax Saving Fund Vs Benchmark's Fund

Year Returns on fund (y) Returns on index(x)

2019-20 -52.35 -51.79
2020-21 82.01 75.76
2021-22 22.49 17.95
2022-23 -24.23 -24.62
2023-24 46.05 27.7

Graph 4.9 Return of Reliance Tax Saving Fund Vs Benchmark's Fund

INTERPRETATION: In table 4.9 shows that the fund yielded 82.01% return while index
return is 75.76% in 2019. In the year 2018 index return is -51.79% while fund return is -
52.35%. so that in year 2019 Reliance fund performe well.

46
4. SBI Magnum Tax Gain

Table 4.10 Return of SBI Magnum Tax Gain Fund Vs Benchmark's Fund

Year Returns on fund (y) Returns on index(x)

2019-20 -54.86 -51.79

2020-21 86.41 75.76
2021-22 12.98 17.95
2022-23 -23.5 -24.62
2023-24 34.29 27.7

Graph 4.10 Return of SBI Magnum Tax Gain Fund Vs Benchmark's Fund

INTERPRETATION: From the table 4.10 found that the fund yielded 86.41% return
while index return is 75.76% in 2021. In the year 2020index return is -51.79% while fund
return is -54.86%. it shows that in 2020 fund and market are not performed.

47
5. ICICI Prudential Tax Plan

Table 4.11 Return of ICICI Prudential Tax Plan Vs Benchmark's Fund

Year Returns on fund (y) Returns on index(x)

2019-20 -56.03 -51.79
2020-21 112 75.76
2021-22 24.11 17.95
2022-23 -23.96 -24.62
2023-24 37.63 27.7

Graph 4.11 Return of ICICI Prudential Tax Plan Vs Benchmark's Fund

INTERPRETATION: Table 4.11 shows that the fund yielded 112% return while index
return is 75.76% in 2021. It shows higher return amoung all the year.

48
CALCULATION OF BETA VLAUES

1. Bajaj Allianz Tax Shield

Table 4.12 Beta Calculation for Bajaj Allianz Tax Shield

Returns on Fund
Year Returns on Index (X) XY X2
(Y)
2019-20 -49.22 -51.79 2549.1 2682.2
2020-21 78.81 75.76 5970.65 5739.58
2021-22 23.47 17.95 421.29 322.2
2022-23 -15.19 -24.62 373.98 606.14
2023-24 29.38 27.7 813.83 767.29
Total 67.25 45 10128.85 10117.41

= 5(10128.85)-(45*67.25)/5*(10117.41)-(45)2
= 0.98

INTERPRETATION :A beta value of 0.98 indicates that the Bajaj Allianz Tax Shield
fund has slightly less volatility compared to the market index. This means that for every
1% change in the market index, the fund's return is expected to change by approximately
0.98%. Since the beta is close to 1, the fund's performance closely follows the market's
movements, with slightly less sensitivity. This implies that the fund behaves similarly to
the market, but with slightly lower risk and return potential.

49
2. HDFC Tax Saver

Table 4.13 Beta Calculation for HDFC Tax Saver

Returns on Fund
Year Returns on Index (X) XY X2
(Y)
2019-20 -51.55 -51.79 2669.77 2682.2
2020-21 99.07 75.76 7505.54 5739.58
2021-22 26.42 17.95 474.24 322.2
2022-23 -22.62 -24.62 556.9 606.14
2023-24 26.59 27.7 736.54 767.29
Total 77.91 45 11943 10117.41

Beta =

= 5(11943)-(45*77.91)/5(10117.41)-(45)2

=1.16

INTERPRETATION : A beta value of 1.16 indicates that the HDFC Tax Saver fund
is slightly more volatile compared to the market index. This means that for every 1%
change in the market index, the fund's return is expected to change by approximately
1.16%. Since the beta is greater than 1, the fund is more sensitive to market movements.
This implies that the fund has higher risk and potentially higher returns compared to the
market. Investors in this fund can expect it to amplify market trends, both upward and
downward.

50
3. RELIANCE Tax Saving Fund

Table 4.14 Beta Calculation for Reliance Tax Saving Fund

Returns on Fund Returns on Index

Year XY X2
(Y) (X)
2019-20 -52.35 -51.79 2711.21 2682.2
2020-21 82.01 75.76 6213.08 5739.58
2021-22 22.49 17.95 403.696 322.2
2022-23 -24.23 -24.62 596.543 606.14
2023-24 46.05 27.7 1275.59 767.29
Total 73.97 45 11200.12 10117.41

Beta =

= 5(11200.35)-(45*73.97)/5(10117.41)-(45)2

= 1.08

INTERPRETATION: A beta value of 1.08 indicates that the Reliance Tax Saving Fund
is slightly more volatile compared to the market index. This means that for every 1%
change in the market index, the fund's return is expected to change by approximately
1.08%. Since the beta is greater than 1, the fund tends to amplify market movements, both
upward and downward. This implies that the fund carries higher risk compared to the
market, but also has the potential for higher returns. Investors in this fund should be
prepared for higher volatility and should expect the fund to perform better than the market
during upswings and worse during downturns

51
4. SBI Magnum Tax Gain

Table 4.15 Beta Calculation for SBI Magnum Tax Gain

Returns on Fund Returns on Index

Year XY X2
(Y) (X)
2019-20 -54.86 -51.79 2841.2 2682.2
2020-21 86.41 75.76 6546.42 5739.58
2021-22 12.98 17.95 232.991 322.2
2022-23 -23.5 -24.62 578.57 606.14
2023-24 34.29 27.7 949.833 767.29
Total 55.32 45 11149.02 10117.41

Beta =

= 5(11149.02)-(45*55.32)/5(10117.41)-(45)2

= 1.10

INTERPRETATION: A beta value of 1.10 indicates that the SBI Magnum Tax Gain
Fund is slightly more volatile compared to the market index. This means that for every 1%
change in the market index, the fund's return is expected to change by approximately
1.10%. Since the beta is greater than 1, the fund tends to amplify market movements, both
upward and downward. This implies that the fund carries higher risk compared to the
market but also has the potential for higher returns. Investors in this fund should be
prepared for higher volatility and should expect the fund to perform better than the market
during upswings and worse during downturns.

52
5. ICICI Prudential Tax Plan

Table 4.16 Beta Calculation for ICICI Prudential Tax Plan

Returns on Fund Returns on Index

Year XY X2
(Y) (X)
2019-20 -56.03 -51.79 2901.79 2682.2
2020-21 112 75.76 8485.12 5739.58
2021-22 24.11 17.95 432.775 322.2
2022-23 -23.96 -24.62 589.895 606.14
2023-24 37.63 27.7 1042.35 767.29
Total 93.75 45 13451.93 10117.41

Beta =

= 5(13451.93)-(45*93.75)/5(10117.41)-(45)2

= 1.29

INTERPRETATION : A beta value of 1.30 indicates that the ICICI Prudential Tax Plan
is significantly more volatile compared to the market index. This means that for every 1%
change in the market index, the fund's return is expected to change by approximately
1.30%. Since the beta is greater than 1, the fund tends to amplify market movements, both
upward and downward. This implies that the fund carries higher risk compared to the
market but also has the potential for higher returns. Investors in this fund should be
prepared for higher volatility and should expect the fund to perform significantly better
than the market during upswings and worse during downturns

53
BETA VALUES OF THE FIVE SCHEMES

Table 4.17 Beta Values estimated of selected tax saving schemes

Fund Beta value Findings

ICICI Prudential Tax Plan 1.29 Aggressive
SBI Magnum Tax Gain 1.1 Aggressive
HDFC Tax Saver Fund 1.16 Aggressive
Reliance Tax saving Fund 1.08 Aggressive
Bajaj Allianz Tax Shield 0.98 Defensive

Graph 4.17 Beta Values estimated of selected tax saving schemes

INTERPRETATION: The result of beta is present in table 4.17. It shows that only Bajaj
Allianz tax shield fund beta value is (0.98< 1), that means only Bajaj Allianz tax shield
fund will be performed in defensive way as compare to all the other selected tax saving
schemes.

54
CHAPTER – V
FINDINGS
SUGGESTIONS
CONCLUSION
5.1 FINDINGS
In order to know the performance of the tax saving schemes in mutual fund as per the
research design from five selected AMC company data was collected. Further the data was
analysed in previous chapter evaluating by ( Average return, standard deviation, beta,
correlation, coefficent of determination and methods of mutual fund) to getting some
finding.

1. An Individual can take an advantage of this funds and schemes to save tax by
investing maximum of Rs 1,00,000.
2. After analyzing the data, it is understood that the ICICI Prudential Tax Plan,
Reliance Tax Saving, Bajaj Allianz Tax Shield and HDFC Tax saver fund have
performed better with average return of 18.75, 14.49, 13.45 and 15.58%
respectively when compared to its benchmark return S&P CNX 500 of 45%.
3. Further, ICICI Prudential Tax Plan has a higher risk (standard deviation) of 64.22,
which has given the highest return among selected schemes. In the case of return,
the SBI Magnum Tax Gain has given less return when compared to its benchmark
of market index with a high risk (standard deviation) of 54.22%.
4. Beta of the selected schemes have posted a beta value less than 1; thus belonging to
defensive category. A beta (<1) implies that this schemes tend to hold portfolio that
were less risky than the market portfolio. So that only Bajaj Allianz Tax Shield has
a defensive performed.
5. According to correlation it is found that the entire schemes are highly correlated
with market index.
6. According to coefficient of determination it is seen that except Bajaj Allianz Tax
Shield Scheme all other scheme are highest values of (r2) indicates that much of
the variation in return of the scheme are return by market.
7. All the five tax saving schemes have positive sharp ratio. The highest sharp ratio is
found in ICICI prudential Tax Plan. While suggest that the fund has generated
adequate returns as against the level of risk.
8. The maximum treynor‟s value of index are found in ICICI Prudential Tax
9. Plan (8.33) and minimum value was found in SBI Magnum Tax Gain (2.78). it
indicates that the schemes have provied adequate returns as against the risk
involved in the investment.

55
5.2 CONCLUSION
Mutual funds are one of the best investments ever created because they are very cost
efficient and very easy to invest in. All the selected schemes have allocated majority of
corpus to large cap stock and some schemes also have allocation to mid cap. Various
external causes affect the fund performance. It is suggestible for the investors to
choose the right scheme according to their risk apatite tolerance and objective of the
scheme. And it is always suggested to invest in equity schemes for longer tenure.
Investors while investing in the mutual funds is very cautious. ICICI Prudential Tax
Plan, HDFC Tax saver fund, SBI Magnum Tax Gain and Reliance Tax Saving fund‟s
beta is more than one, so these funds are having aggressive relationship with market.

56
5.3 SUGGESTIONS
1. Investors can go ahead in investing in ICICI Prudential Tax Plan, Reliance Tax
Saving, Bajaj Allianz Tax Shield and HDFC Tax saver fund for acquiring better
returns as well as tax savings.
2. SBI AMC has to revise SBI Magnum Tax Gain portfolio to increase fund returns
and provide to the investors a more secure investment option along with tax saving.
3. The Bajaj Allianz Tax Shield scheme tends to hold portfolio that were less risky
than the market portfolio.
4. According return against the risk schemes will be ranked accordingly ICICI fund is
ranked 1st, HDFC fund 2nd, Reliance fund is 3rd, Bajaj Allianz fund is 4th and
SBI fund is 5th by using all the three methods.
5. AMC‟s should take more efforts on spreading awareness about taxing mutual
funds as these investment instruments provides a higher return with tax saving
It should also induce technology that reduces turnaround time for services like
investment, redemptions and transfers and bring them on par with bank in
turnaround time.

57
 BIBLIOGRAPHY
JOURNALS :
1. H.Prem Raja ,2007, “Systematic Study of Income Tax”.
2. Allen, F. and D. Gale, 1989, “Optimal Security Design,” Review of Financial
Studies, 1 (3), 229–263.
3. Allen, F. and G. Gorton, 1993, “Churning Bubbles,” Review of Economic Studies,
60 (4), 813-836.
4. Biais, B., T. Foucault, and F. Salanié, 1998, “Floors, Dealer Markets and Limit
Order Markets,” Journal of Financial Markets, 1, 253-284.

DATA SOURCES:-

1. www.icicibank.com
2. www.hdfcfund.com
3. www.icicibank.com
4. www.idbimf.com
5. www.templetonindia.com
6. www.in.finance.yahoo.com
7. www.myiris.com

58