A Project Report on
“An Analysis of Investor’s Behaviour on Various
Investments Avenues in India”
Made by an Individual Research
Submitted in partial fulfillment for the award
Of
MASTER OF BUSINESS ADMINISTRATION
(Finance)
OF
OSMANIA UNIVERSITY
BY
RAKESH REDDY E
103-08-107
(2008 – 2010)
Department of Business Management
NIZAM COLLEGE
(A Constituent College of Osmania University)
Basheerbagh, Hyderabad
CERTIFICATION
This is to certify that the Project Report titled
“An Analysis of Investor’s Behaviour on Various
Investments Avenues in India”
Submitted in partial fulfilment for the award of MBA Programme of
Department of Business Management, O.U. Hyderabad was carried
out by Rakesh Reddy E under my guidance. This has not been
submitted to any other University or Institution for the award of any
degree/diploma/certificate.
Name and address of the Guide Signature of the Guide
DECLARATION
I hereby declare that this Project Report titled “An Analysis of
Investor’s Behaviour on Various Investments Avenues in India”
Submitted by me to the Department of Business Management, O.U.,
Hyderabad, is a bonafide work undertaken by me and it is not
submitted to any other University or Institution for the award of any
degree diploma / certificate or published any time before.
Name and Address of the Student : Signature of the Student
Rakesh Reddy E
H. No: 4-69/61/1
Road # 1
Vidyaranyapuri,
Karimnagar, A.P
ACKNOWLEDGEMENT
My very special gratitude and heartfelt thanks to our College Principal
Dr. Naidu Ashok, and Vice Principal Dr. A. Nakula Reddy for their best
wishes to carry out my project work.
I would like to express my deep gratitude and thanks to our Head of the
Department and my project guide Dr. M. Usha, M.Com, M.Phil, Ph. D., who is
responsible for moulding our thinking to complete this project.
I am extremely thankful to my company guide Mr. Ch. Srinivas,
Relationship Manager, LICMF AMC, Basheerbagh, Hyd, for taking keen
interest and giving valuable guidance at every stage of this project.
I wish to express my sincere thanks to my external guide Ms. Vinita
Sharma, Associate Professor, A. V. College, Postgraduate Centre,
Gaganmahal, Hyd, for her kind support and guidance to complete my project.
I am also thankful to the faculty members Mrs. Madhavi and Mrs.
Saritha for their kind and valuable cooperation, for guiding me all the way for
timely completion of the project. I would also like to thank my parents, friends
and well wishers who encourage me to complete this project successfully.
Date: RAKESH REDDY E
Abstract
Indian investor today have to endure a sluggish economy, the steep market declines
prompted by deteriorating revenues, alarming reports of scandals ranging from illegal
corporate accounting practices like that of Satyam to insider trading to make investment
decisions. Stock market’s performance is not simply the result of intelligible characteristics
but also due to the emotions that are still baffling to the analysts. Despite loads of
information bombarding from all directions, it is not the cold calculations of financial
wizards, or company’s performance or widely accepted criterion of stock performance but
the investor’s irrational emotions like overconfidence, fear, risk aversion, etc., seem to
decisively drive and dictate the fortunes of the market.
This Report while discussing the characteristics of the Indian individual investors
along makes an attempt to discover the relationship between a dependent variable i.e., Risk
Tolerance level and independent variables such as Age, an individual investor on the basis of
the survey. Indian investors are high income, well educated, salaried, and independent in
making investment decisions and conservative investors. From the analysis it was found that
irrespective of gender, most of the investors (54%) are found to have low risk tolerance level
and many others (34%) have moderate risk tolerance level, only 12 % of the investor’s had
high risk tolerance level. It is also found that there is a strong negative correlation between
Age and Risk tolerance level of the investor. Television is the media that is largely
influencing the investor’s decisions. Hence, this study can facilitate the investment product
designers to design products which can cater to the investors who are low risk tolerant.
INDEX
CONTENTS PAGE NO
chapter -1 Introduction 1
1.1 Introduction to the Report 2
1.2 Objectives of the study 3
1.3 Need for the study 5
1.4 Value addition 6
1.5 Limitations of the study 7
1.6 Research Methodology 8
1.7 Sources of Information 9
Chapter - 2 Literature Review 10
Chapter - 3 Industry Profile 13
Chapter - 4 Data Analysis & Interpretation 41
Chapter - 5 Findings & Sugestions 64
Chapter - 6 Summary & Conclusion 68
Bibiliography 70
INDEX OF TABLES
TABLE NO CONTENTS PAGE NO
Table 1 Demographics of the sample investor 43
Table 2 Other characteristics of sample investors 45
Table 2.1 Investors Risk of losing principal amount 45
Table 2.2 Time period preferred to invest 45
Table 2.3 Frequency of monitoring the investment 46
Table 2.4 Investment in equity market 47
Table 2.5 Family Budget 48
Table 2.6 Investment Target 48
Table 2.7 Financial Advisor 49
Table 3 Objectives of Investment 49
Table 3.1 Savings objective 50
Table 3.2 Purpose behind investment 51
Table 3.3 Factors considering before investing 52
Table 4 Demographics based on Occupation 54
Table 5 Investment preference based on occupation 57
Table 5.1 preferred investment avenues for salaried 57
Table 5.2 preferred investment avenues for business people 57
Table 5.3 preferred investment avenues for professionals 58
Table 5.4 preferred investment avenues for housewives 59
Table 5.5 preferred investment avenues for - Overall 59
Table 6 Finding relationship between age and risk 61
Table 7 Suggested Portfolio Construction 67
