PARVEEN Final Project

CHAPTER 1
INTRODUCTION
1.1 INTRODUCTION ABOUT THE INTERNSHIP
The capital asset pricing model depicts the connection between risk and expected return for
resources, especially stocks. Capital asset pricing model is broadly utilized all through back for
the evaluating of dangerous securities, creating expected returns for resources given the danger
of those benefits and furthermore utilized for computing the expenses of Capital.
The concept of risk and return analysis is integral to the process of investing and financing. The
risk and return analysis aims at maximizing the return by creating a balance of risk. Risk and
return are two key determinants of share price. As we know, greater the risk assumed higher will
be the return and lower the risk assumed lower will be the rate of return.
The risk and return analysis using CAPM help us to understand the actual performance of
investment decision in the stock markets with the assessment considered in stipulation of
ordinary return, beta and standard deviation along with the variation returns. Shareholders can
provide and borrow some capital required price of notice equivalent at price of riskless assets.
There is ideal contest where shareholders full amount decide prices based on performance.
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1.2 INDUSTRY PROFILE
A securities exchange or value showcase is an open element for the exchanging of organization
Stock (offers) and subordinates at a concurred value; these are securities recorded on a Stock
Exchange and those lone exchanged secretly.
Real Participants:
 Individual Retail Investors
 Institutional speculators, for example, common assets, banks, insurance agencies and
flexible investments, and furthermore traded on an open market companies exchanging
their own offers.
MEANING
As per segment 4 of securities contract act, 1956 explains term Stock trade as, “ Affiliation of
persons, whether consolidate lay down with the finish objective of serving, overprotective the
subject of buying and controlling securities.
Stock trade gives an advantageous procedure of exchanging where by the financial specialist not
just to get a simple business sector for his shares, additionally the administrations of specialists
who can survey efficiently both the quality and prospects of shares which are being purchased
and sold.
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HISTORY OF STOCK MARKET IN INDIA
Indian securities exchange is one of the most seasoned securities exchange in Asia. East India
Company used to execute credit securities before eighteenth century's over. In 1830s, exchanging
on corporate stocks and offers in bank and cotton presses occurred in Bombay.
THE BOMBAY STOCK EXCHANGE OF INDIA LTD (BSE)
It is Indian stockpile swap trade situated at Dalal street Kala Ghoda Mumbai. It was established
in the year 1875; it was Asia’s primary stock swap.
BSE is world’s best stock swap with mean deal velocity of 6 micro seconds. BSE is 11 th biggest
supply exchange generally capitalization of $1.43 trillion as March 2016, additional 5500
companies are openly scheduled on BSE, stock trading at BSE a/c for only about 4% of the
Indian economy.
The BSE is oldest stock exchange in Asia in 1855 when 5 stock broking can meet beneath
Banyan tree in face of Mumbai town hall. They become an administrator association known as “
The resident split and stock broker’s relationship”. BSE start shared finance process 81000
instructions value Rs 270cr in a particular day March 28, 2016.
THE SECURITIES AND EXCHANGE BOARD OF INDIA LTD (SEBI)
Until late 1980s, Bombay Stock Exchange looked with low straightforwardness and
temperamental clearing and settlement frameworks. Towards the finish of the 1980s, new
monetary powers, the financial development and money emergency stressed the requirement for
modernization of the budgetary framework. Securities and Exchange Board of India was made
by Government of India in the year 1988.
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THE NATIONAL STOCK EXCHANGE OF INDIA LTD (NSE)
NSE is primary stockpile swap of India situated in Mumbai. It is recognized in 1992 as initieal
demutualized electronic swap in the country. It is initial tarde in the country to give a current
completely computerized display based electronic trading scheme it obtainable.
Simple trading capability to shareholders speed crossways the duration and width of the country
as on March 2016 NSE have a sum market place. Capitalization of extra than US$ 1.41 trillion,
creation it the world’s 12th biggest stock swap only about 4% Indian economy in NSI.
It has locate up by a set of lending Indian financial institution of the administration of India to
fetch clearness to the Indian investment market place based on the recommendation lay out by
the government continue.
NSE offer following segments :

 Equities
 Derivatives
 Debt
FOCAL POINTS OF NSE

 Large market with the extensive availability through satellite connected exchanging offer.
 It is a screen based exchanging.
 It guarantees the financial specialist to have a reasonable and straight forward
exchanging.
 Trading with assistance of dematerialized records.
 It permits the brokers to and settles their exchanges through electronics book exchanging
of government securities
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1.3 COMPANY PROFILE
INTRODUCTION
• Geojit Financial Services Limited, formerly known as Geojit BNP Paribas Financial
Services Limited, is a retail Financial Services company in India.
• 1n 1995, the company got listed in the name of Geojit Securities Ltd. Its name was
changed to Geojit Financial Services Ltd in 2003.
• Geojit Financial Services was founded as a partnership firm by C J George and Ranajit
Kanjilal in 1987. Later in 1993 Ranajit Kanjilal retired from the firm. In 1995 Kerala
State Industrial Development Corporation acquired 24% stake in the company.
• Geojit is a sanction individual from the Financial Planning Standards Board of India and
is one of the biggest DP agents in the nation.
• With a nearness in all the significant conditions of India, the system of more than 540
workplaces crosswise over 300 urban areas and towns by and by covers Andhra Pradesh,
Bihar, Chhattisgarh, Goa, Gujarat, Haryana, Jammu and Kashmir, Karnataka, Kerala,
Madhya Pradesh, Maharashtra, New Delhi, Orissa, Punjab, Rajasthan, Tamil Nadu and
Pondicherry, Uttar Pradesh, Uttaranchal and West Bengal. It has various subsidiary
namely Geojit and services and Geojit Financial Distribution is engaged in insurance
referrals and Geojit Financial Management. Commodities engaged in commodity trading,
Geojit Credits is a Non-Banking Financial Company, Geojit Technologies is into
software development.
• It is a main money related administrations organization in India. They have more than
865000 customers and a nationwide system of more than 511 workplaces is spread
crosswise over 19 states and 2 association regions an Assets Under Custody and
administration of Rs.32,379 crore as on 31 March 2017.
• Geojit Financial Services is listed on both NSE and BSE.
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ABOUT GEOJIT FINANCIAL SERVICES LTD
A Leading Retail Financial Services Provider : Geojit is a main money related administrations
organization in India with a developing nearness in the Middle East. The organization rides on its
rich involvement in the capital market to the offer its customers a wide arrangement of reserve
funds and speculation arrangements. The requirements of more than 8,94,000 customers are met
by means of multichannel administrations – a countrywide system of more than 514 workplaces,
telephone administrations, devoted client mind focus and the web. The array of significant worth
included items and administrations offered ranges from values and subordinates to shared assets,
life and general protection and outsider settled stores.
Geojit Financial Services Ltd gives an extensive variety of items and administrations which
incorporates values, subsidiaries, cash prospects, care accounts, common assets, life coverage
and general protection, IPOs, portfolio administration administrations, property administrations,
edge exchanging and credit against shares.
Geojit introduced the franchise concept in broking in 1996 at Rajapalayam, with the unique
feature of customer assets being controlled by Geojit. The franchisee’s responsibilities are to
organize investments and employees for an out let gradually SEBI approved the model after
careful observation. Thus the erst while sub broker model got banned by SEBI and they
approved franchisees model developed by Geojit through which only the main broker would
have control on customers assets and transactions.
Geojit educates clients on net safety and also offers the most reasonable rates to the clients. It
was the first Kerala based company to introduce employee stock option plan in 2000 to benefit
employees even at the lowest level. And also it was the first company to open NRI services in
Middle East through a joint venture in 2001. During 2005 and 2006, Geojit opened exclusive
women branches in Kochi, Mumbai and Chennai which was again a pioneering attempt by
Geojit Financial Services Ltd to inculcate investment awareness amongst women’s.
The company has also taken some socially responsible steps by,
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 Providing medical support to the mentally challenged patients of palluruthy relief
settlement.
 Financial supporting heart surgery of poor children in TamilNadu.
 Providing scholarships to needy students on case basis.
 Sponsoring seminars/workshops conducted by students in various educational

institutions.
 Providing educational and financial support to underprivileged children through CASP.
 Making sustainable contributions to the tsunami fund. Employees also participated by

contributing one days wages.
 Employees participation in helping needy cases of surgery, treatment etc.
1.3.1 PROMOTERS
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NAME DESIGNATION
Mr. A. P. Kurain Non-Executive Independent Chairman of the
Board
Mr. C. J. George Managing Director, Executive Director
Mr. Ramanathan Bupathy Non-Executive Independent Director
Mr. Mahesh Vyas Non-Executive Independent Director
Dr. M. Beena Director – Nominee of Kerala State Industrial
Development Corporation Ltd, Non-Executive
Director
Mr. Punnoose George Non-Executive Director
Mr. Rakesh R Jhunhunwala Non-Executive Director
Mr. Liju Jhonson Compliance Officer, Company Secretary
Mr. Mr. Satish Menon Executive Director
Mr. A. Balakrishnan Managing Director – Geojit Technologies Pvt.
Ltd.
Mr. Sharad Sharma Executive Director
Mr. Franciska Decuypere Additional Director
Mr. Sanjeev Rajan Chief Financial Officer
Mr. Radhakrishnan Nair Additional Independent Director
Mr. Jaya Alexander Chief of Human Resources
1.3.2 VISION, MISSION AND QYALITY POLICY
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VISION
 The Vision of Geojit is to be leading financial and commodities markets intermediary for
individual and institutional clients from Indian Overseas.
 They continually attempt to raise their products and service standards by intelligent
application of technology and processes.
MISSION
 They understand and respect customer needs to consistently deliver total quality solution
through constants skills up-gradation
 They believe that the company culture helps to attract and retain the best talent
 They sustain inflexible ethical principles and strive to maintain a distinctive identity in
public mindset through innovation and quality.
 They are committed to achieve gainful development consistently.
 They freely share their investments experience across all ages and stratum of society to
encourage wise investments for a better future.
QUALITY POLICY
Gifted, effective and capable group of adolescents taking off prominent applications for the
worldwide business group, remembering genuine quality, add up to consumer loyalty, conveying
on time, perfect time, inevitably. The Geojit Technologies dependably make progress toward
proceeded with change and advancement their own particular set gauges in accomplishing all out
quality administration. The nature of the items and administrations conveyed by Geojit
Technologies to clients is the worry of each work force in the association.
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All are along these lines imaginatively engaged with giving superb items and administrations
through:
 Responsiveness to client needs;

 Provision of work fulfillment and capable professions;
 Constant estimation and observing of all activities;
 Continuous changes of strategies, products and ventures;
 Performance of task answerably.
1.3.3 PRODUCTS AND SERVICES
Geojit Financial Services Ltd plays a major role in Indian Capital Market by providing different
financial services to the investors. The company offers broad variety of savings option in equity,
future and options, IPOs and Mutual Funds. The company is regarded as India’s first online
share brokers and the first internet share trading company in India.
PRODUCTS/SERVICES PROFILE
• Equities
• Derivatives
• Mutual Funds
• Currency Futures
• Portfolio Management Services
• Initial Public Offerings(IPO’s)
• Custody Accounts
• Life and General Insurance
• Loans against Shares
• Margin Funding
• Property Services
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SERVICES
The scope of Geojit Financial Services Ltd and various functions can be clubbed under the
following heads :
 EQUITIES (Broking Services through)

• National Stock Exchange (NSE)
• The Stock Exchange, Mumbai (BSE)
• Net Trading
 DERIVATIVES (NSE)
• Index Futures
• Index Options
• Stock Futures
• Stock Options
 DEPOSITORY SERVICES – NSDL

• All Depositary Services available at all branches
• Delivery of share through internet (Speed-e)
• Off market truncation
• Internet services
• DEMAT
 PORTFOLIO MANAGEMENT
Geojit Financial Services Ltd. is SEBI registered Portfolio Manager (Reg No. IN000316).
They offer discretionary portfolio management services to those who can invest a
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minimum of Rs. 5,00,000. The initial investments can be made either by transferring the
existing shares or by cash.
 DISTRIBUTION
• Mutual Funds
• IPO’s
• Corporate Bonds and Government Securities
• Life and General Insurance Procedure
 INTERNET TRADING
It includes the act of placing buy/sell orders for financial securities and currencies with
the use of brokerage’s internet-based property trading platforms. It includes :
• Insurance Broking Servicing
• Depositary Services
• Equity Trading
• Insurance Services
1.3.4 AREA OF OPERATIONS
Geojit Financial Services Ltd is relatively accessible in all the principle conditions of India, the
relationship of more than 540 workplaces crosswise over 300 urban communities and towns by
and by covers Andhra Pradesh, Bihar, Chhattisgarh, Goa, Gujarat, Haryana, Jammu and
Kashmir, Karnataka, Kerala, Madhya Pradesh, Maharashtra, New Delhi, Orissa, Punjab,
Rajasthan, Tamil Nadu and Pondicherry, Uttar Pradesh, Uttaranchal and West Bengal.
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1.3.5 INFRASTRUCTURE FACILITIES
 The Ballari branch is situated in a very busy area and Heart of the Ballari city.
 The branch has planned many more branches in Ballari city and its nearby places.
 The branch is fully computerized and servicing to customer facilities.
 The branch is Air Conditioner, Parking facility and Water facility available to its
employees as well as to its customers.
 The Branch majorly focuses on IT purposes.
 The branch will credit customer’s account directly and an ECS (Electronic Clearing
Service) entry will appear in its customer’s pass book.
1.3.6 COMPETITORS INFORMATION
• ICICI Direct Securities Ltd.
• Reliance Money
• Share Khan
• Kotak Securities Ltd.
• Karvy Stock Broking Ltd.
• Mothilal oswal securities ltd.
• HDFC Securities Ltd.
• SMC Global Online
• Aditya Birla Money
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RELIANCE MONEY
Group is all-inclusive financial services and explanation supplier. Biggest non-banking

circulation path with over 10,000 outlets and 20,000 touch points extend diagonally 5165 cities
to different requirements of over 3 million alive customers. It endeavors for later way investor
carry out in fiscal markets and fiscal services.
KOTAL SECURITIES LTD.
A Kotak security is a prominent name in stock broking space and it definitely leverages its
banking services brand equity. Kotak securities offers an array of trading platforms along with
lighter versions for internet bandwidth issues the company was established in 1994 with its
headquarter in Mumbai, India while comparing IIFL got A1+ rating from ICRA. This reflects
that the Kotak Securities Ltd. has highest credit-quality of short-term debt instruments.
KARVY STOCK BORKING LTD.
Karvy Stock Broking Limited was built up in 1982 with it's headquarter at Hyderabad. It was
built up by a gathering of Hyderabad-based honing Chartered Accountants. At starting stage it
was little in measure. It was begun with a capital of Rs. 1, 50,000. Karvy ran KS among the best
player in every one of the fields it works.
MOTILAL OSWAL SECURITIES LTD.
It was started in 1987, is one of the oldest stock broking houses of the country. Although, their
major focus has been institutional broking in the initial years but off late, they have been
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gradually focusing on retail broking as well. It offers a variety of fiscal good and services, such
as broking and division prosperity organization, venture banking, confidential equity and quality
organization.
ADITYA BIRLA MONEY
It was incorporated in 1994, is a full service broker based out of Chennai. For around 15 years
from 1994, the broker was known as Apollo Sindhoori Capital Investments until 2009 when
Aditya Birla Group bought 76% of it. From then on, it has been part of the group and is known
as Aditya Birla Money instead. It has memberships with NSE, BSE, MSEL, MCX and NCDEX.
HDFC SECURITIES LTD.
The HDFC Securities also provides 3-in-1 account to its clients due to its presence in banking
services. It boosts of highly flexible and seamless trading platforms across devices including a
trading terminal blink. Although, the concerning part in this is that HDFC securities charges its
clients for using Blink software for their trading needs. None the less, HDFC Securities has a
rare provision of NRI accounts which a lot of stock brokers don’t provide to its clients.
SMC GLOBAL ONLINE SECURITIES LTD.
It is a leading full service stock broker based out of New Delhi, India. Established in the year
1994, the full service broker enjoys presence with more than 50 branches across the country and
2400 sub-broker network. Apart from retail stock broking, SMC Global also provides Wealth
Management, DP and Research services. SMC Global also has international presence across
Dubai.
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1.3.7 SWOT ANALYSIS
STRENGTHS
 30 years’ experience in the capital market

 A pioneer in online trading since 2000
 It provides multichannel services to its customers like internet, phone, branch, etc.
 The company works for over 600000 clients.
 Global capability
 The company has skilled workforce
 It has always been an initiator thereby using the first mover advantage in financial
services.
 It has 511 offices across 19 states and 2 union territories across India.
WEAKNESSES
 Low publicity causes lack of awareness amongst investors.

 Less diffusion in some regions of the country.
 Deteriorating physical assets of the company over a period of time.
 Due to poor customer service, the company is losing its customers.
OPPORTUNITIES
 Growing rural market through modified and cheaper services.

 Savings by earning urban youth.
 Innovative products and services, new markets and rising country.
 Expansion rates and profitability, global markets.
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 Passage of favorable laws by the Government.
 Making agreements with International players will create opportunities due to perceived
brand value of such International players.
THREATS
 Strict economic measures by Government and RBI.

 Entry of overseas money in Indian Market.
 Increasing competition due to the entrance of banks into trading.
1.3.8 FUTURE GROWTH AND PROSPECTS
The present scenario of securities exchange in India have enhanced in an extremely colossal
manner. There exists a reasonable, straight forward and fast exchange.
Selfie is a cutting edge exchanging application which joins a few new web advances to meet
individuals developing needs. It was created with an emphasis on enabling the customers by
giving them outright control over their exchanging/contributing capacities and furnishing them
with auspicious research inputs and progressed graphing highlights. It is the first of its kind in
India to have such a thorough scope of highlights in a solitary stage. Geojit intends to twofold
client base to 2 million out of 5 years.
"They intend to expand their client base to 2 million throughout the following five years from 9
lakh now. They will likewise contract around 1,000 market experts or relationship administrators
with that."Their good faith and market outreach designs emerge from the gigantic increment in
SIP (precise speculation designs) financial specialists, who now remain at more than 1.75 lakh.
Every one of these clients came in the previous 8-9 months alone," Geojit originator and
overseeing chief C J George said.
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"The renaming as Geojit Financial Services is in accordance with the repeated investor
understanding amongst Geojit and BNP Paribas. The French multinational bank will keep on
being a conspicuous investor alongside Kerala State Industrial Development Corporation and
Rakesh Jhunjhunwala," George said.
PROSPECTS: It is a document that must accompany with the application forms of all public
issues of securities, weather ordinary shares, preference shares or debentures. It contains the
terms and conditions of the issue, along with some specific features of the security, the purpose
for which the issue is being made, the company’s track records, the risk inherent for which the
capital is being raised and so on. It may also contain some additional information such as the
data of conversion, exercise price, redemption, and interest rates and so on. SEBI has laid out
certain guidelines for the information content of prospectus. Misleading or false information in
the prospectus can attract penal action.
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1.3.9 FINANCIAL STATEMENT
BALANCE SHEET
As at As at As at
PARTICULARS 31 March 2017 31 March 2016 31 March 2015
(Rs.) (Rs.) (Rs.)
A. EQUITY AND LIABILITIES
1. Shareholder’s funds
(a) Share capital 235,544,665 234,898,476 231,383,195
(b) Reserves and surplus 3.715,666,433 3.318,438,183 3,168,452,062
3,951,211,098 3,553,336,659 3,399,835,257
2. Share application money pending allotment 8,12,306 470,678 16,441
3. Non-current liabilities
(a) Long-term liabilities 15,425,040 18,179,891 25,024,490
(b) Long-term provisions 49,564,649 11,416,834 4,349,378
64,989,689 29,596,725 29,373,868
4. Current Liabilities
(a) Short-term borrowings - - 250,000,000
(b) Trade payables 67,849,145 73,757,695 213,262,879
(c) Other current liabilities 2,262,000,383 1,517,601,588 1,282,057,771
(d) Short-term provisions 11,366,824 1,513,668 490,010,591
2,341,216,352 1,592,872,951 2,235,331,241
TOTAL 6,358,229,445 5,176,277,013 5,664,556,807
B. ASSETS
1. Non-current Assets
(a) Fixed assets
i. Tangible fixed assets 481,769,205 515,181,546 494,270,484
ii. Intangible fixed assets 68,860,730 64,834,338 69,723,182
550,629,935 580,015,884 563,993,666
(b) Non-current investments 282,713,619 382,713,619 382,713,619
(c) Deferred tax assets (Net) 32,085,000 31,378,000 48,144,000
(d) Long-term loans and advances 923,114,268 1,040,437,756 1,110,631,368
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(e) Other non-current assets 1,996,424 2,509,801 3,046,746
1,790,539,246 2,037,055,060 2,108,529,399
2. Current Assets
(a) Current investments 722,068,702 - -
(b) Trade receivables 1,337,510,651 962,543,207 1,144,146,946
(c) Cash and cash equivalents 1,803,077,103 1,408,534,268 1,865,076,625
(d) Short-term loans and advances 212,326,030 222,509,533 219,573,159
(e) Other current assets 492,707,713 54,634,945 327,230,678
4,567,690,199 3,139,221,953 3,556,027,408
TOTAL 6,358,229,445 5,176,277,013 5,664,556,807
STATEMENT OF PROIT AND LOSS for the year ended 31 March 2017
For the year For the year For the year

ended 31 ended 31 ended 31
PARTICULARS March 2017 March 2016 March 2015
(Rs.) (Rs.) (Rs.)
1) Revenue from operations 2,443,463,004 2,172,91,063 2,720,222,326
2) Other income 224,035,452 190,680,131 172,445,277
3) Total Revenue (1+2) 2,667,498,456 2,363,661,194 2,892,667,603
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4) Expenses :
(a) Operating expenses 562,012,097 487,783,461 609,759,823
(b) Employee benefit expenses 803,258,539 765,242,451 748,787,734
(c) Finance costs 5,310,734 7,266,142 10,373,893
(d) Depreciation and amortization 123,850,231 113,192,479 84,798,218
expenses
(e) Other expenses 432,650,135 444,868,096 428,474,129
Total Expenses 1,927,081,736 1,818,352,629 1,882,193,797
5) Profit before exceptional item and 740,416,720 545,308,565 1,010,473,806

tax (3-4)
6) Exceptional item (100,000,000) - -
7) Profit before tax (5+6) 640,416,720 545,308,565 1,010,473,806
8) Tax expense :
(a) Current tax 256,970,000 172,580,000 323,840,000
(b) Current tax expense relating to prior 1,000,000 - -
years
(c) Deferred tax (707,000) 16,766,000 11,160,000
Total expenses 257,263,000 189,346,000 335,000,000
9) Profit for the year (7-8) 383,153,720 355,962,565 675,473,806
10) Earnings per equity share (face
value of Rs. 1 each)
(a) Basic 1.63 1.53 2.94
(b) Diluted 1.63 1.52 2.92
CHAPTER 2
CONCEPTUAL BACKGROUND & LITERATURE REVIEW
2.1 INTRODUCTION
The Capital Asset Pricing Model (CAPM) is a standout amongst the most vital territories of
Financial Management. Indeed, it has even been said that back just turn into 'a completely
fledged, logical train' when William Sharpe distributed his determination of the Capital Asset
Pricing Model in the year 1986.
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In Finance, recall that arrival is an element of hazard. The higher the hazard, the higher will be
the rate of return and the lower is the hazard taken the lower will be the rate of return. Capital
Asset Pricing Model is one of the instruments utilized by the fund experts to compute the arrival
on the speculation made by the speculators. CAPM is the apparatus used to figure return in light
of a hazard estimation. CAPM depends on a hazard multiplier called the beta coefficient.
CAPM is an apparatus utilized by financial specialists to decide the hazard related with a
potential speculation and furthermore gives a plan to the speculators concerning what can be
normal profit for their ventures. Capital Asset Pricing Model was presented by William Sharpe
alongside an equation of working out the hazard as who expresses that a speculation
accompanies two kinds of dangers.
I. Systematic Risk: productive danger is a sort of peril that can't be expanded away, for instance,
financing expenses and subsidence’s. It is generally called wild danger. As the market moves and
changes happen which impact the market, each individual assed is affected to some degree and
accordingly they are fragile to change causing a strange condition of danger.
II. Unsystematic Risk: it is generally called controllable danger that can be improved through
growing the traverse of a wander portfolio therefore chance is specific to particular stocks and
sufficiently addresses no association amongst stocks and market advancements.
CAPM communicated that theorists are compensated for putting it all on the line rather than
risking everything as a money related pro can without a lot of an extend upgrade this peril away.
Consider risk can't be wiped out even by holding each one of the offers in a securities trade, in
this manner CAPM has exhibited a procedure for assuming that peril.
DEFINITION
The Capital Asset Pricing Model is a model that portrays the connection between risk and
expected return for resources, especially stocks. CAPM is generally utilized all through back for
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the estimating of hazardous securities, producing expected returns for resources given the danger
of those benefits and figuring expense of Capital.
CAPM FORMULA
The direct connection between the arrival required on a speculation and its efficient hazard is
spoken to by the CAPM equation.
E(Ra) = RFR + β [E(Rm) – RFR]
Where,
E(Ra) = Expected Rate of Return on a hazardous resource.
RFR = Risk Free Rate
β = Beta
E(Rm) = Expected Market return
The condition clarifies that the normal rate of profit for given hazardous resource E(Ra) is
equivalent to the entirety of without risk rate (RFR) and Beta(β) balanced market chance
premium ([E(Rm) – RFR]).
1CAPM equation is that of a straight line (y = mx + c)
Where, y = E(Ra)
c = RFR
x=β
m = [E(Rm) – RFR]
Let’s plot this equation on a graph.
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Green line represents the CAPM equation. This line is known as Security Market Line (SML).
It is also to be noted that when β = 1, then E(Ra) = E(Rm) and the portfolio is known as market
portfolio.
ASSUMPTIONS OF CAPM
 CAPM assumes that all investors are rational and risk-averse, holding a diversified
portfolio with an aim to maximize economic utilities.
 Investor having a portfolio is the combination of both market portfolio and the risk-free
rate which is adjusted to their risk-averse appetite.
 It assumes that transaction, administrative and other overhead costs are zero.
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 This model assumes that the expected return on a risky asset can be determined as a
function of its systematic risk only.
 There are no taxes.
 No investor’s activities can have an impact on market rates.
 The quantities of all financial assets are given and fixed.
 It assumes that all assets are perfectly divisible and liquid.
 Have homogenous expectations.
 Assumes that all information is available at the same time to all investors.
COMPONENTS OF CAPM
 Risk Free Rate (RFR): it is the rate that allows investors to earn a risk free return.
Though no assets are risk free but U.S. Treasury bills and bonds are used as a proxy for
the risk free rate. The use of RFR depends on the duration of risky asset under
consideration, using long term bonds for longer risky assets and so forth.
 Expected Market return (E(Rm)): this component determines the expected return of
the market as a whole and can be based on past returns or expected future returns. There
are different ways to know expected market return.
 E(Rm) – RFR: it is also known as market risk premium i.e. how much did market as a
whole return above the risk free rate.
 Beta (β): it is one of the most important components of CAPM. Beta measures the
systematic risk which is considered while calculating the expected return on the risky
asset.
If β > 1, then it implies that the asset is riskier than the market as a whole and thus
E(Ra) > E(Rm)
If β < 1, it implies that the asset is less risky than the market as a whole and thus
E(Ra) < E(Rm)
25
β is defined by the formula:
where,
Cov(i,mkt) = covariance between the asset’s return and market return
σ_mkt^2 = standard deviation of market
Thus β is the standardized measure of systematic risk.
PROBLEMS WITH CAPM
 Unsystematic risk is assumed to be compensated by holding a well-diversified portfolio.

 It assumes that there is no taxes and transaction or any other overhead cost are zero
whereas, nothing comes for free.
 It also assumes that Risk-free rate exists whereas, we just use treasury bills as proxy for
risk-free rate because nothing is risk-free in this universe.
 It assumes that risk of an asset is only dependent on beta i.e. market risk. Whereas, all
other factors are ignored.
 Empirical tests show market anomalies like the size and value effect that cannot be
explained by the CAPM.
MERITS OF CAPM
 Capital Asset Pricing Model generates a tentatively resulting correlation connecting

necessary return and orderly risk has been subjected to different experiential studies.
 Consider efficient risk sparkly actuality in which the majority shareholder contain
diversify portfolio which unmethodical risk be fundamentally rejected.
26
 Normally a great contract improved technique of manipulative price of equity than
dividend growth model it openly take into relation a company’s stage of organized
danger family member to the stock market as entire.
DE-MERITS OF CAPM
 Risk free rate (Rf) : Normally recognized velocity use Rf is the capitulate on small
phrase Govt securities. Topic by means of involvement is acquiring exchange every day,
creating disturbed.
 Return on Market (Rm) : It is measured as total sum of investment gains and dividend
for the market. It can be miserable; a extended time market revisit is used soft the revisit
an adding up topic returns are retrospective and not agent of outlook market returns.
 Capability to have access to at a Risk free rate : CAPM builds on 4 main assumptions,
counting changes impossible genuine earth image. The declaration, by shareholders may
have right of entry to and give at a danger free of charge rate, is unachievable in
pragmatism. Person investor not talented makes use @ rates US Govt make of it.
 Purpose of plan substitute Beta : Business use CAPM to ass’s savings wanted for
discover a beta thoughtful assignment. Frequently substitute beta essential. The correctly
influential one to correctly asses’ project is tricky and can influence dependability of the
outcome.
2.2 LITERATURE REVIEW
Wong, Tan and Liu (2006) investigate the cross-sectional stock return behavior on the A-share
market of the Shanghai Stock Exchange (SSE) that is segmented from world’s other equity
markets. The effect of beta, firm size, book-to-market equity ratio is considered in the study. The
27
data for the study is collected for a period of 10 years from 1993 to 2002. The result shows that
the smaller firms and value stocks perform better and systematic risk is negatively significant in
down markets. The proportion of floating equity has no direct effect on stock returns.
Isa, Puah and Yong (2008) look at the relevance of CAPM in clarifying the risk - return
connection in Malaysian securities exchange. The information for the investigation is gathered
for the time of 12 years from January 1995 to December 2006. Straight relapse strategy is
considered in the examination. The test is carried on four models: the standard CAPM show with
steady Beta (Model I), the standard CAPM display with time-differing beta (Model II), the
CAPM demonstrate restrictive on isolating positive and negative market chance premiums with
consistent beta (Model III), and the CAPM display contingent on isolating positive and negative
market chance premiums with time fluctuating beta (Model IV). The outcome demonstrates that
both the model I and Model II are measurably irrelevant though Model III and Model IV are
factually critical. It closes saying that time changing beta gives better informative power.
Dey, Maitra, Participant and IRMA (2009) analysed the importance of multifactor model of the
Capital Asset Pricing Model of the Indian stock market. The data for the study is taken from
National Exchange of India Ltd. for the period of 10 years from 1999 to March 2009. SNP CNX
NIFTY is considered in the study. The result shows that the multifactor model supports the
CAPM.
Choudhary and Choudhary (2010) analysed the validity of the CAPM of stock market in India.
The Financial data taken is as monthly returns from 278 companies of BSE 500 index which is
listed on the BSE. The data is taken for the period of 22 years from Jan 1996 to Dec 2017. Beta
is considered in the study. The findings of the study indicate evidence against the CAPM.
Maji (2010) investigated the validity and stability of the non diversifiable risk in Indian capital
market. The data taken for the study is of 10 stocks and 10 sectoral indices listed on Bombay
Stock Exchange. The data is taken for the period of 4 years from January 2005 to December
28
2008. The result shows that the study provides evidence against the stability of systematic risk
and also against the CAPM hypothesis.
Gupta and Agarwal (2011) investigate the study that aims at correlating and comparing the
distribution of stock market returns of India with other selected Asian companies. The data for
the study is collected from www.yahofinance.com for six major nations from BSE SENSEX of
India, Hang seng of china, JKSE of Indonesia, KLSE of Malaysia, Nikkie of Japan and KS11 of
Korea for a period 5 years from 2005 to 2009. Closing values of the stocks is considered in the
study. The result shows that there is very weak correlation between Indian markets and Hong
Kong, Indonesia, Japan and Malaysia.
Yuvan and Savickas (2013) analysed the typical cross-sectional asset pricing tests lean to suffer
from brutal risk-premium estimation errors because of small difference in betas. It advocate
focusing on the theoretic linear beta-pricing model that assumes a risk-free rate and directly
testing whether the ex-ante risk premium estimates are consistent with the observed ex-post risk
premia, which allows one to easily perceive misspeicifed models.
Rizwan, Shaikh and Shehzadi (2013) examine the validity of Capital Asset Pricing Model of
cement industry of Pakistan listed on Karachi stock exchange. The data for the study is collected
from KSE site and Yahoo finance for a period of 6 years from 2004 to 2009. The result shows
that the residual risk has no effect on the expected return of portfolios.
Azher (2013) examine whether the conditional relationship between beta and return propsed by
Pettengill et al (1995) exist in an emerging stock market such as Pakistan. The data for the study
is taken from KSE site for a period of 17 years from 1992 to 2008. The result shows that there is
a flat unconditional relationship between beta and return.
Balakrishnan (2014) analysed the ability of various asset pricing models in order to explain the
characteristics such as company size and value, of the ranked portfolios. The data collected is
29
taken from the Bombay Stock Exchange of India Ltd. for 488 companies and RBI site. The data
is taken for a period of 16 years from January 1997 to June 2012. Market Capitalization (MC),
Total Assets (TA), Enterprise Value (EV), Price-to-Book (P/B) and Price-to-Earnings (P/E) ratio
are considered in the study. The results are found vibrant to the alternate versions of size and
value of the company.
Harshita, Singh and Yadav (2015) investigated the applicability of five factor model in the
Indian stock market and to compare the performance with the three factor model and CAPM.
The data collected is for the constituent companies of CNX 500 which is taken from the financial
database –ace equity and RBI site. The data is collected for the period of 15 years from October
1999 to September 2014. Market capitalization, Book-to market equity, Profitability and
investment are considered in the study. The result shows that the three factor model performs
better than the CAPM whereas the five factor model performs better than the three factor model.
The four factor model has highest explanatory power where the investment is ignored and when
the investment is considered then the five factor model has the highest explanatory power.
Reddy and Durga (2015) analysed the importance of CAPM in Indian stock market. The data for
the study is taken from National Stock Exchange of India Ltd. for the period of 10 years from
January 2006 to August 2014. Regression is considered in the study to know the excess portfolio
return on excess market return. The result shows that the capital asset pricing model partially
holds in Indian Stock Markets.
Pavirala (2015) examine the correlation between return and unsystematic risk of the IR stocks
listed on National Stock Exchange of India Ltd. the data for the study is collected on quarterly
basis from NSE site for seven selected stocks for a period of 2 years from April 2012 to March
2014. The result shows that there is no significant relationship exists among return and
unsystematic risk.
Pankaj Choudhary (2016) made a study on – Testing of CAPM in Indian context with the
objective to know about the asset pricing models by collecting data from Indian Capital Market.
30
The financial data is collected from NSE 500 index to built 25 portfolio’s by using beta as a
factor. The data is taken for the period of 15 years from January 2001 to January 2015. Cross-
sectional regression is considered in the study. The result shows that the CAPM is not relevant
for asset pricing in India because it is incapable of explaining the variations in cross sectional
returns for the Indian stock market.
Pandey (2016) investigated the risk-return relationship of stock-exchange in India within the
framework of CAPM. The financial data is collected from the National Stock Exchange of India
Ltd. and RBI site for the period of 5 years for 21 stocks. Standard deviation, coefficient of
correlation and mean are considered for the study. The results prove the CAPM hypothesis and
offer evidence favor to the CAPM in Indian stock market.
Sowjanya and Kothari (2016) examine the relationship between risk and return in the Indian
stock markets. The study compares the risk-return of banking sectors as one of the service
industries and auto mobile stocks as one of the automobile industries. The data for the study is
collected for a period of 5 years from 2011 to 2015. Regression analysis and t-test is considered
in the study. The result shows that there is no difference in the stocks of banking and auto
mobile.
Hussain and Islam (2017) analysed the validity of the capital asset pricing model in India. The
data for the study is taken for 63 companies of Nifty 100 index listed on NSE. The data is taken
for the period of 14 years from January 2003 to November 2015. Time-series and cross-sectional
Regression as two-step testing procedure for CAPM, which was developed by Fama and
Macbeth (1973), is considered in the study. The study concludes that the CAPM is not a valid
test to explain the risk-return characteristics of assets listed on the NSE over the sample period.
31
Ratra (2017) made a study to test the Capital Asset Pricing Model applicability in Indian stock
market with the objective to calculate the rate of return and risk involved with investment made
by the investors. The financial data for this study is taken from the National Stock Exchange of
India ltd. for the period of 5 years from January 2012 to December 2016. Market Capitalization
is considered for the study. The result shows that the capital asset pricing model does not have
any applicability in Indian stock market because the difference between expectations and actual
returns is very significant at normal risk level.
Cheriyan and Lazar (2017) analysed liquidity-adjusted CAPM of stock market in India. The data
for the study is taken from Bombay Stock Exchange of India ltd. for the period of 6 months from
15 January 2016 to 15 July 2016. Standard deviation and Beta is considered in the study. The
result shows that the Liquidity is an important factor that affects the price and value of the assets.
Bhuva, Mankad and Bhatt (2017) analysed the validity of CAPM and stability of Beta of FMCG
Companies in Indian stock market and also aims at identifying the accuracy of beta on the basis
of company return. The data for the study is collected for seven FMCG companies for a period of
5 years from 2008 to 2012. Correlation analysis is considered in the study. The result shows that
there is a significant relationship between CAPM return and actual risk-return associated with
market beta and CAPM beta.
32
CHAPTER 3
RESEARCH DESIGN
I have undertaken the study to know the risk and return analysis using Capital Asset Pricing
Model for the BSE 30 companies selected to find out Beta of market return from 1 st January
2008 to 31st December 2017.
TOPIC CHOOSEN FOR THE STUDY:
“CAPM - AN EVALUATION OF RISK AND RETURN AT GEOJIT FINANCIAL

SERVICES LTD. BALLARI”.
3.1 STATEMENT OF THE PROBLEM
Motto of any investor is to earn the maximum return on their investments but selecting the stock
based on maximum return is not sufficient. Investors even consider the other factors while
selecting a stock besides the maximum return. Investors need to maximize the expected return
subjected to the assessment and capacity to take risk. Investors need to make a decision based on
the return and risk associated with the securities for a certain period of time. The risk connected
with the examination of investment decision makes the study significant.
3.2 NEED FOR THE STUDY
The concept of security analysis is based on risk and return. To earn return on investment, the
investment has to be made for some period of time which includes risk. Every investor needs to
avoid risk in order to maximize return. Investors can increase their return only when they are
ready to increase the risk. Before making an investment the investors should have a complete
knowledge of its components. To avoid risk we are hedging that will help us to reduce the risk in
adverse economic situations to some extent.
33
3.3 OBJECTIVES OF THE STUDY
 To calculate the risk and return of the stock market viz., INDIAN BSE SENSEX
 To measure the systematic risk of the securities with the help of Beta.
 To evaluate the performance of stock market by using Capital Asset Pricing Model.
 To make a comparative study of risk and return of BSE 30 companies.
3.4 SCOPE OF THE STUDY
This study is limited to constituents of IDIAN BSE SENSEX. The BETA is calculated based on
the returns on daily basis for a limited period of 10 years starting from 1 st January 2008 to 31st
December 2017. The study aims to examine the risk and return relationship of stocks. The firm
selected for the study is listed on the BSE as SENSEX is considered as the market index.
3.5 RESEARCH METHODOLOGY
SOURCES OF DATA
The study is based on the secondary data collected from the INDIAN BSE SENSEX. The data is
collected on the daily market prices of the 30 BSE companies. In addition even the other sources
for data collection is used such as magazines, books, newspapers, internet websites, journals,
reports by management, scholars, researchers and so on.
The reason behind choosing the daily prices is to know the long-term fluctuations in the market
prices of the stocks due to both internal and external factors. Through all this it is possible to
make an analysis by using daily 10 years data for the study.
34
SAMPLING SIZE: BSE 30 companies are taken for the study (Adani Ports and Special
Economic Zone Ltd., Asian Paints Ltd., Axis Bank Ltd., Bajaj Auto Ltd., Bharti Airtel Ltd., Coal
India Ltd., Dr. Reddys Laboratories Ltd., HDFC Bank Ltd., Hero Motocorp Ltd., Hindustan
Unilever Ltd., Housing Development Finance Corporation Ltd., ICICI Bank Ltd., IndusInd Bank
Ltd., Infosys Ltd., ITC Ltd., Kotak Mahindra Bank Ltd., Larsen & Toubro Ltd., Mahindra &
Mahindra Ltd., Maruti Suzuki India Ltd., NTPC Ltd., Oil and Natural Gas Corporation Ltd.,
Power Grid Corporation of India Ltd., State Bank of India, Tata Motors – DVR ordinary, Tat
Motors Ltd., Tata Steel Ltd., Wipro Ltd., Yes Bank Ltd.)
DATA COLLECTION MATHOD
Secondary source of data is used for the study. Data is collected for the 30 companies that are
listed on Bombay Stock Exchange of India Ltd. which is collected from the BSE and RBI
website for a period of 10 years from 2008 to 2017. SENSEX is considered as market index for
the study.
3.6 LIMITATIONS OF THE STUDY
 Only secondary source of data is obtained for the study i.e., BSE SENSEX.
 Time and area is also a limited factor for the study.
 This study includes data only for 10 years to calculate risk and return of securities.
 The index selected is standard and poor SENSEX changes in the index could result in
discrepancies in the results obtained.
 Variations in calculation may occur as the CAPM is tested by using ex-post data instead
of ex-ante data.
35
3.7 CHAPTER SCHEME
The undertaking is designed into the 5 chapters, as follows:
Chapter 1: Introduction
This chapter offers with the Introduction of selected topic, Industry profile, Company profile
(Promoters, vision challenge and first-class coverage, merchandise/provider profile, place of
operation, competitor’s data, SWOT evaluation, Future boom & possibilities and Financial
Statement).
Chapter 2 : Conceptual background and Literature Review
This chapter offers with the theoretical background of the take a look at in short and not less than
20 literature critiques.
Chapter 3 : Research Design
This chapter offers with the assertion of hassle, Need for the have a look at, Objectives of the
look at, scope of the look at, Research technique, Limitations of the study and Chapter scheme.
Chapter 4 : Analysis and Interpretation
This chapter deals with the Analysis and Interpretation of the information gathered with relevant
table and graphs.
Chapter 5 : Findings and Conclusion
This chapter deals with the synopsis of findings and end.
Bibliography
This chapter deals with the bibliography of gathering statistics from extraordinary assets for the
have a look at.
36
CHAPTER 4
ANALYSIS AND INTERPRETATION
Table 4.1 : The Results of Intercept and Beta of SENSEX Companies

Regress
SL
Name of the ion 201 201 201 20 20 20 20 201 20 200
No
company coeffici 7 6 5 14 13 12 11 0 09 8
.
ents
- - - -
Interce 0.6 0.1 0.0 0.1 0.1 0.1 0.0 0.0 0.2 0.0
pt 62 81 13 06 66 27 44 21 55 95
1.3 1.4 1.4 1.8 2.1 1.5 1.3 1.2 1.1 1.3
1 Yes Bank Ltd Beta 73 23 69 20 69 03 66 74 32 12
- - - - - -
Interce 0.2 0.0 0.0 0.0 0.1 0.0 0.0 0.1 0.2 0.0
pt 19 71 18 51 23 65 12 84 47 43
0.4 0.5 0.6 0.4 0.3 0.6 0.8 0.8 0.8 0.9
2 Wipro Ltd Beta 53 62 15 22 58 27 57 65 07 21
- - - - - - -
Interce 0.1 0.1 0.1 0.1 0.0 0.0 0.1 0.0 0.0 0.2
pt 11 62 42 84 47 46 43 65 82 26
1.4 1.6 1.5 1.4 1.3 1.5 1.2 1.5 1.4 1.2
3 Tata Steels Ltd Beta 84 20 05 73 00 65 00 96 38 45
- - - - -
Interce 0.2 0.0 0.0 0.0 0.0 0.0 0.5 0.1 0.3 0.3
pt 05 68 64 43 37 81 44 02 77 53
1.6 1.8 1.2 1.4 1.0 1.5 2.3 1.5 1.1 0.9
4 Tata Motors Ltd Beta 18 92 95 61 68 24 40 24 74 86
5 Tata Motors Ltd – Interce - 0.0 - 0.0 0.0 0.1 - 0.0 0.5 -
DVR pt 0.2 02 0.0 44 04 17 0.6 94 29 2.5
50 25 54 96
37
1.6 1.6 1.5 1.7 1.1 1.7 2.2 1.3 0.0 1.2
Beta 18 39 24 13 28 14 11 55 74 08
- - - - -
Interce 0.0 0.0 0.0 0.0 0.2 0.0 0.1 0.1 0.0 0.0
pt 16 18 09 18 00 20 14 25 13 58
Tata Consultancy 0.2 0.7 0.5 0.4 0.4 0.5 1.0 0.8 0.8 0.8
6 Services Ltd Beta 77 15 57 30 99 90 08 32 04 68
- - - - - -
Interce 0.0 0.0 0.0 0.8 0.1 0.0 0.0 0.0 0.0 0.0
pt 98 34 99 77 59 10 95 05 56 50
State Bank of 1.8 1.6 1.3 1.5 1.1 1.5 1.1 1.1 1.1 1.0
7 India Beta 82 26 39 12 25 60 33 59 62 00
- - - - - - -
Interce 0.1 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.3 0.0
pt 73 17 76 43 16 21 32 82 80 10
Reliance 1.1 0.8 1.1 1.2 1.1 1.0 1.1 1.0 1.3 1.1
8 Industries Ltd Beta 32 16 70 86 11 74 43 87 38 50
- - - - -
Interce 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
pt 22 95 23 49 79 07 70 83 65 42
Power Grid Corp 0.5 0.7 0.6 0.7 0.6 0.6 0.5 0.5 0.7 0.9
9 of India Ltd Beta 67 03 44 97 02 26 59 06 26 27
- - - - - - - -
Interce 0.0 0.0 0.1 0.1 0.0 0.0 0.5 0.0 0.0 0.0
pt 62 99 17 05 12 54 40 02 43 00
0.6 0.9 1.0 1.6 1.2 0.7 1.0 0.6 0.7 0.8
10 ONGC Ltd Beta 68 83 87 39 79 37 20 49 85 44
11 NTPC Ltd - - - - - -
Interce 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1
pt 40 43 24 92 80 75 02 97 31 28
Beta 0.6 0.7 0.8 1.0 0.7 0.7 0.8 0.5 0.5 0.8
38
84 93 78 04 20 02 20 66 58 94
- - -
Interce 0.1 0.0 0.1 0.1 0.0 0.1 0.0 0.0 0.3 0.0
pt 42 52 48 57 38 27 92 81 04 64
Maruti Suzuki 1.0 1.2 0.7 1.0 0.9 0.7 0.7 0.6 0.6 0.6
12 India Ltd Beta 09 32 53 09 69 45 42 93 29 69
- - - - -
Interce 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.3 0.2
pt 87 36 32 27 22 40 71 98 28 00
Mahindra & 1.0 0.9 0.9 0.8 0.8 0.8 1.0 1.0 0.9 0.9
13 Mahindra Ltd Beta 55 38 84 64 88 87 80 71 53 15
- - - - - -
Interce 0.1 0.0 0.0 0.0 0.2 0.0 0.1 0.0 0.0 0.3
pt 26 15 34 18 07 42 50 04 17 88
Larsen & Toubro 0.9 1.3 1.1 1.4 1.2 1.6 1.1 0.9 1.2 0.9
14 Ltd Beta 89 48 82 73 18 56 26 66 33 98
- - - -
Interce 0.0 0.0 0.2 0.1 0.0 0.0 0.1 0.2 0.0 0.1
pt 71 06 00 13 07 58 21 70 06 29
Kotak Mahindra 0.6 0.8 1.4 1.0 1.1 1.1 1.1 0.5 1.3 1.2
15 Bank Ltd Beta 67 46 41 12 86 58 23 89 90 97
- - - -
Interce 0.0 0.1 0.0 0.0 0.0 0.1 0.1 0.1 0.0 0.0
pt 92 38 31 08 16 04 34 81 24 76
1.2 0.9 0.7 0.4 0.9 0.4 0.6 0.6 0.5 0.5
16 ITC ltd Beta 84 04 84 59 15 44 82 01 49 72
- - - - -
Interce 0.0 0.0 0.2 0.3 0.1 0.1 0.0 0.0 0.1 0.0
pt 62 46 28 07 47 51 18 64 84 37
0.7 0.7 0.5 0.6 0.5 0.8 0.9 0.7 0.6 0.7
17 Infosys Ltd Beta 31 57 61 70 49 82 84 56 65 22
18 IndusInd Bank Ltd Interce 0.0 0.0 0.1 0.1 - 0.1 0.0 0.1 0.2 -
39
0.0 0.1
pt 83 49 01 38 57 35 73 78 66 68
0.8 1.0 1.0 1.1 1.6 1.1 1.1 1.0 1.1 1.1
Beta 07 15 70 60 84 90 43 74 31 42
- - - - - - -
Interce 0.0 0.0 0.0 0.6 0.0 0.0 0.0 0.0 0.0 0.0
pt 84 23 84 00 67 49 49 11 96 52
1.7 1.6 1.4 1.2 1.5 1.6 1.4 1.5 1.5 1.5
19 ICICI Bank Ltd Beta 25 68 85 29 40 96 13 08 46 14
- - - -
Interce 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.0 0.0
pt 24 06 65 21 60 22 77 42 32 97
0.9 1.0 1.3 1.1 1.3 0.8 1.0 0.3 1.1 1.1
20 HDFC Ltd Beta 77 66 46 66 08 38 58 70 34 97
- -
Interce 0.1 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.0 0.2
pt 26 24 62 91 12 66 60 30 54 15
Hindustan 0.7 0.6 0.4 0.2 0.6 0.3 0.4 0.5 0.3 0.5
21 Unilever Ltd Beta 72 22 95 54 83 50 09 18 21 15
- - -
Interce 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1
pt 03 44 38 74 09 74 42 28 97 83
Hero Motocorp 0.8 0.9 0.7 0.8 0.7 0.7 0.5 0.5 0.4 0.4
22 Ltd Beta 56 94 13 37 44 80 29 07 71 06
- -
Interce 0.1 0.0 0.0 0.0 0.0 0.0 0.5 0.0 0.0 0.0
pt 13 39 69 42 48 97 86 66 17 80
0.6 0.7 0.8 1.0 1.2 0.9 0.9 0.8 0.8 0.9
23 HDFC Bank Ltd Beta 78 49 76 08 65 51 14 87 31 84
24 Dr. Reddy's Interce - - 0.0 0.0 0.1 0.0 0.0 0.1 0.2 -
Laboratories Ltd pt 0.1 0.0 01 74 11 40 41 29 52 0.0
40
50 07 62
0.5 0.6 0.7 0.1 0.5 0.2 0.5 0.4 0.4 0.3
Beta 92 64 23 90 48 03 72 08 68 78
- - - - - - -
Interce 0.1 0.0 0.0 0.0 0.1 0.0 0.0 0.2 0.0
pt 17 42 54 27 02 10 42 32 34
0.6 0.7 0.7 1.3 0.5 0.6 0.5 0.6 0.6
25 Coal India Ltd Beta 54 38 12 31 99 02 55 33 92
- - - - - - -
Interce 0.1 0.0 0.0 0.0 0.0 0.1 0.0 0.0 0.4 0.1
pt 23 49 07 50 26 15 65 12 94 36
1.0 0.6 0.7 0.6 1.2 0.9 0.7 0.7 0.6 0.8
26 Bharti Airtel Ltd Beta 40 94 05 91 31 23 53 19 96 46
- - -
Interce 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.4 0.0
pt 16 16 32 39 74 59 00 08 73 50
0.7 0.8 0.8 0.6 0.8 0.6 0.7 0.6 0.5 0.7
27 Bajaj Auto Ltd Beta 79 73 32 03 34 39 47 10 54 20
- - - - - - -
Interce 0.0 0.0 0.0 0.6 0.0 0.0 0.0 0.0 0.0 0.1
pt 40 10 07 13 77 45 56 44 50 08
1.2 1.3 1.4 2.0 1.6 1.7 1.3 1.2 1.3 1.2
28 Axis Bank Ltd Beta 24 13 06 59 28 83 15 05 38 32
- - -
Interce 0.0 0.0 0.0 0.0 0.9 0.1 0.0 0.1 0.2 0.0
pt 32 04 83 95 48 68 01 58 11 35
0.7 0.7 0.9 0.7 1.8 0.4 0.3 0.3 0.3 0.2
29 Asian Paints Ltd Beta 17 54 02 52 47 66 46 48 25 45
30 Adani Ports & - - - -
special economic Interce 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.0 0.3
Zone Ltd pt 15 01 52 93 35 43 22 27 22 11
Beta 1.5 1.5 1.1 1.8 0.7 0.8 0.7 1.3 0.8 0.8
41
02 31 98 73 68 97 47 60 03 74
42
ANALYSIS
 Yes Bank Ltd has a positive intercept in the year 2016, 2015, 2014, 2012, 2011
and 2009, whereas a negative intercept in the year 2017, 2013, 2010 and 2008. The
highest intercept of the company is 0.255 in the year 2009 and lowest intercept is -0.662
in the year 2017. The company’s Beta is more than one for all the past 10 years i.e. from
2017 to 20008. The company has a highest Beta of 2.169 in the year 2013 and lowest
Beta of 1.132 in the year 2009.
 Wipro Ltd has a positive intercept in the year 2015, 2013, 2011 and 2009,
whereas a negative intercept in the year 2017, 2016, 2013, 2014, 2012, 2010 and 2008.
The highest intercept of the company is 0.247 in the year 2009 and lowest intercept is
-0.219 in the year 2017. The company’s Beta is less than one for all the past 10 years i.e.
from 2017 to 20008. The company has a highest beta of 0.921 in the year 2008 and
lowest beta of 0.358 in the year 2013.
 Tata Steels Ltd has a positive intercept in the year 2017, 2016 and 2009, whereas
a negative intercept from the year 2015 to 2010 and 2008. The highest intercept of the
company is 0.162 in the year 2016 and lowest intercept is -0.226 in the year 2008. The
company’s Beta is more than one for all the past 10 years i.e. from 2017 to 20008. The
company has a highest Beta of 1.620 in the year 2016 and lowest Beta of 1.200 in the
year 2011.
 Tata Motors Ltd has a positive intercept in the year 2016, 2013, 2012, 2010 and
2009, whereas a negative intercept in the year 2017, 2015, 2014, 2011 and 2008. The
in the year 2011. The company’s Beta is more than one for all the past 10 years except
for the year 2008. Company has a highest Beta of 2.340 in the year 2011 and lowest Beta
of 0.986 in the year 2008.
43
 Tata Motors Ltd - DVR has a positive intercept in the year 2016, 2014, 2013,
2012, 2010 and 2009, whereas a negative intercept in the year 2017, 2015, 2011 and
2008. The highest intercept of the company is 0.529 in the year 2009 and lowest intercept
is -2.596 in the year 2008. The company’s Beta is more than one for all the past 10 years
except for the year 2009. The company has a highest Beta of 2.211 in the year 2011 and
lowest Beta of 0.074 in the year 2009.
 Tata Motors Ltd - DVR has a positive intercept in the year 2016, 2014, 2013,
2012, 2010 and 2009, whereas a negative intercept in the year 2017, 2015, 2011 and
 Tata Consultancy Services Ltd has a positive intercept in the year 2017, 2014,
2013, 2011 and 2010, whereas a negative intercept in the year 2016, 2015, 2012, 2009
and 2008. The highest intercept of the company is 0.200 in the year 2013 and lowest
intercept is -0.058 in the year 2008. The company’s Beta is less than one for all the past
10 years except for the year 2011. The company has a highest Beta of 1.008 in the year
2011 and lowest Beta of 0.277 in the year 2017.
 State Bank of India has a positive intercept in the year 2016, 2012, 2010 and
2008, whereas a negative intercept in the year 2017, 2015, 2014, 2013, 2011 and 2009.
-0.877 in the year 2014. The company’s Beta is more than one for all the past 10 years
 Reliance Industries Ltd has a positive intercept in the year 2016, 2015, and 2008,
whereas a negative intercept in the year 2017, 2014, 2013, 2012, 2011, 2010 and 2009.
44
 Power Grid Corporation of India Ltd has a positive intercept in the year 2016,
2015, 2014, 2011 and 2008, whereas a negative intercept in the year 2017, 2013, 2012,
2010, and 2009. The highest intercept of the company is 0.095 in the year 2016 and
lowest intercept is -0.083 in the year 2010. The company’s Beta is less than one for all
the past 10 years. The company has a highest Beta of 0.927 in the year 2008 and lowest
 ONGC Ltd has a positive intercept in the year2009 and zero intercept in the year
2008, whereas a negative intercept from the year 2017 to 2010. The highest intercept of
the company is 0.043 in the year 2009 and lowest intercept is -0.117 in the year 2015.
The company’s Beta is more than one for the year 2015, 2014, 2013, 2011 and less than
one for the year 2017, 2016, 2012, 2010, 2009 and 2008. The company has a highest Beta
of 1.639 in the year 2014 and lowest Beta of 0.649 in the year 2010.
 NTPC Ltd has a positive intercept in the year 2016, 2015, 2011 and 2008,
whereas a negative intercept in the year 2017, 2014, 2013, 2012, 2010, and 2009. The
in the year 2010. The company’s Beta is less than one for all the past 10 years except for
the year 2014. The company has a highest Beta of 1.004 in the year 2014 and lowest Beta
of 0.558 in the year 2009.
 Maruti Suzuki India Ltd has a positive intercept from the year 2017 to 2012 and
2009, whereas a negative intercept in the year 2011, 2010 and 2008. The highest intercept
of the company is 0.157 in the year 2014 and lowest intercept is -0.092 in the year 2011.
The company’s Beta is more than one for the years 2017, 2016, 2014 and less than one
for the years 2015, 2013, 2012, 2011, 2010, 2009 and 2008. The company has a highest
Beta of 1.232 in the year 2016 and lowest Beta of 0.629 in the year 2009.
 Mahindra & Mahindra Ltd has a positive intercept in the year 2015, 2014, 2012,
2011 and 2009, whereas a negative intercept in the year 2017, 2016, 2013, 2010, and
is -0.200 in the year 2008. The company’s Beta is less than one for all the past 10 years
except for the years 2017, 2011 and 2010. The company has a highest Beta of 1.080 in
the year 2011 and lowest Beta of 0.864 in the year 2014.
45
 Larsen & Toubro Ltd has a positive intercept in the year 2016, 2012, 2010 and
2009, whereas a negative intercept in the year 2017, 2015, 2014, 2013, 2011, and 2008.
 Kotak Mahindra Bank Ltd has a positive intercept in the year 2017, 2014, 2013,
2012, 2011 and 2009, whereas a negative intercept in the year 2016, 2015, 2010, and
 ITC Ltd has a positive intercept in the year 2014, 2013, 2012, 2011, 2009 and
2008, whereas a negative intercept in the year 2017, 2016, 2015, and 2010. The highest
intercept of the company is 0.134 in the year 2011 and lowest intercept is -0.181 in the
year 2010. The company’s Beta is less than one for all the past 10 years except for the
year 2017. The company has a highest Beta of 1.284 in the year 2017 and lowest Beta of
0.444 in the year 2012.
 Infosys Ltd has a positive intercept in the year 2013, 2011, 2010, 2009 and 2008,
whereas a negative intercept in the year 2017, 2016, 2015, 2014, and 2012. The highest
intercept of the company is 0.184 in the year 2009 and lowest intercept is -0.307 in
the year 2014. The company’s Beta is less than one for all the past 10 years. The
year 2013.
 IndusInd Bank Ltd has a positive intercept for all the years except for the years
2013 and 2008, whereas a negative intercept from the year 2017 to 2012 and 2014 to
is -0.168 in the year 2008. The company’s Beta is less more one for all the years except
for the year 2017. The company has a highest Beta of 1.190 in the year 2012 and lowest
46
 ICICI Bank Ltd has a positive intercept in the year 2012, 2010, and 2008, whereas
a negative intercept in the year 2017, 2016, 2015, 2014, 2013, 2011, and 2009. The
highest intercept of the company is 0.052 in the year 2008 and lowest intercept is
-0.096 in the year 2009. The company’s Beta is more than one for all the past 10 years.
The company has a highest Beta of 1.725 in the year 2017 and lowest Beta of 1.229 in the
year 2014.
 HDFC Ltd has a positive intercept in the year 2017, 2015, 2014, 2012, 2011 and
2008, whereas a negative intercept in the year 2016, 2013, 2010 and 2009. The highest
year 2010. The company’s Beta is more than one for all the years except for the years
2017, 2012 and 2010. The company has a highest Beta of 1.346 in the year 2015 and
 Hindustan Unilever Ltd has a positive intercept in the year 2017, 2015 to 2010
and 2008 , whereas a negative intercept in the year 2016 and 2009. The highest intercept
of the company is 0.215 in the year 2008 and lowest intercept is -0.054 in the year 2009.
The company’s Beta is less than one for all the past 10 years. The company has a highest
 Hero Motocorp Ltd has a positive intercept in the year 2016, 2014, 2013, 2011,
2010, 2009 and 2008, whereas a negative intercept in the year 2017, 2015 and 2012. The
in the year 2012. The company’s Beta is less than one for all the past 10 years. The
year 2008.
 HDFC Bank Ltd has a positive intercept for all the past 10 years other than for the
year 2013 and 2011, whereas a negative intercept in the year 2013 and 2011. The highest
intercept of the company is 0.097 in the year 2012 and lowest intercept is -0.150 in
the year 2017. The company’s Beta is less than one for all the years except for the years
2014 and 2013. The company has a highest Beta of 1.265 in the year 2013 and lowest
47
 Dr. Reddys Laboratories Ltd has a positive intercept from the year 2015 to 2009,
whereas a negative intercept in the year 2017, 2016 and 2008. The highest intercept of
 Coal India Ltd has a positive intercept in the year 2012 and 2011, whereas a
negative intercept in the year 2017 to 2013, 2010 and 2009. The highest intercept of the
company is 0.042 in the year 2011 and lowest intercept is -0.232 in the year 2010. The
company’s Beta is less than one for all the years except for the year 2014. The company
has a highest Beta of 1.331 in the year 2014 and lowest Beta of 0.555 in the year 2011.
 Bharti Airtel Ltd has a positive intercept in the year 2017, 2011 and 2008,
whereas a negative intercept in the year 2016 to 2012, 2010 and 2009. The highest
year 2009. The company’s Beta is less than one for all the years except for the year 2017
and 2013. The company has a highest Beta of 1.231 in the year 2013 and lowest Beta of
0.691 in the year 2014.
 Bajaj Auto Ltd has a positive intercept from the year 2017 to 2011 and 2009,
whereas a negative intercept in the year 2013, 2010 and 2008. The highest intercept of
 Axis Bank Ltd has a positive intercept in the year 2012, 2010 and 2008, whereas a
negative intercept from the year 2017 to 2013, 2011 and 2009. The highest intercept of
The company’s Beta is more than one for all the past 10 years. The company has a
highest Beta of 2.059 in the year 2014 and lowest Beta of 1.205 in the year 2010.
48
 Asian Paints Ltd has a positive intercept in the year 2017, 2015, 2014, 2012,
2011, 2010 and 2009, whereas a negative intercept in the year 2016, 2013, and 2008. The
in the year 2013. The company’s Beta is less than one for all the years except for the year
2013. The company has a highest Beta of 1.847 in the year 2013 and lowest Beta of 0.245
in the year 2008.
 Adani Ports & Special Economic Zone Ltd has a positive intercept in the year
2017, 2016, 2014, 2013, 2011, and 2009, whereas a negative intercept in the year 2015,
2012, 2010 and 2008. The highest intercept of the company is 0.093 in the year 2014 and
lowest intercept is -0.627 in the year 2010. The company’s Beta is more than one for the
years 2017 to 2014, 2010 and less than one for the year 2013, 2012, 2011, 2009 and
2008. The company has a highest Beta of 1.873 in the year 2014 and lowest Beta of 0.747
in the year 2011.
49
Table 4.2 : Return Analysis of BSE 30 Companies
SL
Name of the company 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008
No.
- - -
- 0.002 0.003 0.002 0.000 0.006
0.0000 0.000 0.000 0.003
0.0018 1 3 9 9 0
2 8 8
1 Yes Bank Ltd
- - - -
- 0.000 0.001 0.000 0.004
0.000 0.0001 0.000 0.000 0.002
0.0008 1 6 1 8
6 7 7 6
2 Wipro Ltd
- -
0.002 - 0.000 0.000 0.001 0.000 0.005
0.0027 0.002 0.004
0 0.0014 0 2 2 6 2
6 9
3 Tata Steels Ltd
- -
- 0.001 - 0.001 0.001 0.002 0.002 0.007
0.004 0.005
0.0002 1 0.0007 3 0 5 3 5
2 6
4 Tata Motors Ltd
- -
- 0.000 - 0.002 0.000 0.003 0.002 0.005
0.005 0.011
0.0006 4 0.0003 5 6 1 2 9
1 1
5 Tata Motors Ltd – DVR
6 Tata Consultancy Services 0.0006 0.000 - 0.000 0.002 0.000 0.000 0.001 0.003 -
Ltd 0 0.0001 8 3 4 2 9 0 0.002
50
6

- - - -
0.000 - 0.001 0.001 0.002
0.0011 0.001 0.001 0.002 0.001
7 0.0011 7 0 8
3 0 0 9
7 State Bank of India
- -
0.000 0.000 0.000 0.000 0.000 0.000
0.0003 0.0007 0.001 0.002
3 1 4 9 0 8
5 7
8 Reliance Industries Ltd
- - -
0.001 0.001 0.000 0.000 0.001
0.0004 0.0002 0.000 0.000 0.001
2 4 6 2 5
4 4 7
9 Power Grid Corp of India Ltd
- - -
- 0.000 0.000 0.000 0.000 0.002
0.0001 0.000 0.003 0.002
0.0012 9 5 3 5 7
5 6 0
10 ONGC Ltd
- - - -
0.000 0.000 0.000 0.001
0.0004 0.0002 0.000 0.000 0.000 0.000
6 4 0 3
4 8 6 9
11 NTPC Ltd
12 Maruti Suzuki India Ltd 0.0025 0.000 0.0014 0.002 0.000 0.002 - - 0.004 -
7 8 9 1 0.001 0.000 9 0.002
6 2 1
51

- - - -
- 0.001 0.000 0.001 0.006
0.000 0.0003 0.000 0.000 0.003
0.0009 2 2 4 2
2 3 4 9
13 Mahindra & Mahindra Ltd
- - -
0.000 - 0.001 0.002 0.000 0.003
0.0001 0.001 0.002 0.005
4 0.0005 5 1 8 7
1 6 4
14 Larsen & Toubro Ltd
- -
0.000 - 0.002 0.000 0.001 0.000 0.004
0.0014 0.001 0.004
1 0.0013 4 6 8 0 1
4 0
15 Kotak Mahindra Bank Ltd
- - -
- 0.000 0.000 0.001 0.000 0.001
0.0005 0.000 0.000 0.000
0.0003 6 6 5 7 8
9 5 6
16 ITC ltd
- - - - -
- 0.001 0.001 0.003
0.0002 0.000 0.001 0.000 0.000 0.001
0.0014 9 2 8
3 4 6 7 4
17 Infosys Ltd
- -
0.000 0.002 0.000 0.002 0.002 0.006
0.0017 0.0009 0.000 0.003
7 8 4 6 8 2
4 9
18 IndusInd Bank Ltd
52
- - -
0.000 - 0.000 0.002 0.001 0.003
0.0010 0.001 0.001 0.002
2 0.0010 1 2 3 5
2 8 9
19 ICICI Bank Ltd
- - -
0.000 0.001 0.000 0.001 0.002
0.0013 0.0006 0.000 0.001 0.001
1 6 0 1 9
3 9 9
20 HDFC Ltd
-
0.001 0.000 0.001 0.001 0.000 0.000 0.000
0.0021 0.000 0.0006
3 5 1 2 8 4 9
1
21 Hindustan Unilever Ltd
0.000 - 0.001 0.000 0.000 0.000 0.000 0.003 0.000
0.0010
6 0.0005 8 5 1 0 8 4 9
22 Hero Motocorp Ltd
- -
0.000 0.001 0.000 0.001 0.001 0.002
0.0018 0.0006 0.003 0.001
5 5 1 9 4 5
5 6
23 HDFC Bank Ltd
- -
- 0.000 0.001 0.001 0.000 0.001 0.004
0.0000 0.000 0.001
0.0008 1 1 4 7 6 0
1 4
24 Dr. Reddy's Laboratories Ltd
25 Coal India Ltd - - - 0.001 - 0.000 0.000 -
0.0004 0.000 0.0005 4 0.000 8 0 0.002
53
2 7 0

- - - -
0.000 0.000 0.000 0.000
0.0024 0.000 0.0000 0.000 0.002 0.000
4 4 0 6
3 1 0 7
26 Bharti Airtel Ltd
- -
0.000 0.001 0.001 0.000 0.000 0.006
0.0010 0.0003 0.000 0.002
3 1 3 3 4 6
3 2
27 Bajaj Auto Ltd
- - -
0.000 - 0.000 0.002 0.001 0.003
0.0010 0.000 0.001 0.001
2 0.0002 2 3 4 5
4 8 6
28 Axis Bank Ltd
- - -
0.000 0.001 0.002 0.002 0.003
0.0011 0.0008 0.003 0.000 0.000
2 9 2 0 2
0 3 7
29 Asian Paints Ltd
- - -
0.000 - 0.003 0.000 0.000 0.002
0.0018 0.000 0.001 0.004
Adani Ports & special 5 0.0006 3 9 7 7
4 9 7
30 economic Zone Ltd
54
ANALYSIS:
 Yes Bank Ltd has a positive return in the year 2016, 2014, 2012, 2010 and 2009,
whereas a negative return in the year 2017, 2013, 2011, 2008 and zero return in
the year 2015. The company has highest return of 0.0060 in the year 2009 and
lowest return of -0.0038 in the year 2008.
 Wipro Ltd has a positive return in the year 2015, 2014, 2013, 2012 and 2009,
whereas a negative return in the year 2017, 2016, 2011, 2010 and 2008. The
company has highest return of 0.0048 in the year 2009 and lowest return of
-0.0026 in the year 2008.
 Tata Steels Ltd has a positive return in the year 2017, 2016, 2013, 2012, 2010 and
2009, whereas a negative return in the year 2015, 2011, 2008 and zero return in
 Tata Motors Ltd has a positive return in the year 2016, 2014, 2013, 2012, 2010
and 2009, whereas a negative return in the year 2017, 2015, 2011 and 2008. The
-0.0056 in the year 2008.
 Tata Motors Ltd – DVR has a positive return in the year 2016, 2014, 2013, 2012,
2010 and 2009, whereas a negative return in the year 2017, 2015, 2011 and 2008.
The company has highest return of 0.0059 in the year 2009 and lowest return of
-0.0011 in the year 2008.
 Tata Consultancy Services Ltd has a positive return in the year 2017, 2014, 2013,
2012, 2011, 2010 and 2009, whereas a negative return in the year 2015, 2008 and
zero return in the year 2016. The company has highest return of 0.0030 in the year
2009 and lowest return of -0.0026 in the year 2008.
 State Bank of India has a positive return in the year 2017, 2016, 2012, 2010 and
2009, whereas a negative return in the year 2015, 2014, 2013 and 2008. The
-0.0020 in the year 2011.
55
 Reliance Industries Ltd has a positive return in the year 2017 to 2012 and 2009,
whereas a negative return in the year 2011, 2008 and zero return in the year 2010.
-0.0027 in the year 2008.
 Power Grid Corp of India Ltd has a positive return in the year 2017, 2016, 2015,
2014, 2012, 2011 and 2009, whereas a negative return in the year 2013, 2010 and
2008. The company has highest return of 0.0015 in the year 2009 and lowest
return of -0.0017 in the year 2008.
 ONGC Ltd has a positive return in the year 2017, 2014, 2013, 2012, 2010 and
-0.0036 in the year 2011.
 NTPC Ltd has a positive return in the year 2017, 2016, 2015, 2014 and 2009,
 Maruti Suzuki India Ltd has a positive return in the year 2017, 2016, 2015, 2014,
2013, 2012 and 2009, whereas a negative return in the year 2011, 2010 and 2008.
-0.0021 in the year 2008.
 Mahindra & Mahindra Ltd has a positive return in the year 2015, 2014, 2013,
2012 and 2009, whereas a negative return in the year 2017, 2016, 2011, 2010 and
2008. The company has highest return of 0.0062 in the year 2009 and lowest
return of -0.0039 in the year 2008.
 Larsen & Toubro Ltd has a positive return in the year 2017, 2016, 2014, 2012,
2010 and 2009, whereas a negative return in the year 2015, 2013, 2011 and 2008.
-0.0054 in the year 2008.
56
 Kotak Mahindra Bank Ltd has a positive return in the year 2017, 2016, 2014,
2013, 2012 and 2009, whereas a negative return in the year 2015, 2010 and 2008.
-0.0040 in the year 2008.
 ITC Ltd has a positive return in the year 2017, 2014, 2013, 2012, 2011 and 2009,
whereas a negative return in the year 2016, 2015, 2010 and 2008. The company
has highest return of 0.0018 in the year 2009 and lowest return of -0.0009 in the
year 2016.
 Infosys Ltd has a positive return in the year 2017, 2013, 2010 and 2009, whereas
a negative return in the year 2016, 2015, 2014, 2012, 2011 and 2008. The
-0.0014 in the year 2015, 2014 and 2008.
 IndusInd Ltd has a positive return in the year 2017, 2016, 2015, 2014, 2013, 2012,
2010 and 2009, whereas a negative return in the year 2011 and 2008. The
-0.0039 in the year 2008.
 ICICI Bank Ltd has a positive return in the year 2017, 2016, 2013, 2012, 2010
and 2009, whereas a negative return in the year 2015, 2014, 2011, 2008. The
-0.0029 in the year 2008.
 HDFC Ltd has a positive return in the year 2017, 2016, 2015, 2014, 2013, 2012
and 2009, whereas a negative return in the year 2011, 2010, 2008 and zero return
in the year 2013. The company has highest return of 0.0029 in the year 2009 and
lowest return of -0.0019 in the year 2010 and 2008.
 Hindustan Unilever Ltd has a positive return for all the past 10 years except 2016,
whereas a negative return in the year 2016. The company has highest return of
0.0021 in the year 2017 and lowest return of -0.0001 in the year 2016.
 Hero Motors Corp Ltd has a positive return in the year 2017, 2016, 2014 to 2008,
whereas a negative return in the year 2015 and zero return in the year 2011. The
57
-0.0005 in the year 2015.
 HDFC Bank Ltd has a positive return in the year 2017 to 2012, 2010 and 2009,
whereas a negative return in the year 2011 and 2008. The company has highest
return of 0.0025 in the year 2009 and lowest return of -0.0035 in the year 2011.
 Dr. Reddys Laboratories Ltd has a positive return in the year 2016, 2014, 2013,
2012, 2010 and 2009, whereas a negative return in the year 2017, 2011, 2008 and
zero return in the year 2015. The company has highest return of 0.0040 in the year
 Coal India Ltd has a positive return in the year 2014 and 2012, whereas a negative
return in the year 2017, 2016, 2015, 2013, 2010 and zero return in the year 2011.
-0.0020 in the year 2010.
 Bharti Airtel Ltd has a positive return in the year 2017, 2014, 2013 and 2010,
the year 2015 and 2011. The company has highest return of 0.0024 in the year
 Bajaj Auto Ltd has a positive return in the year 2017 to 2014, 2012 and 2009,
whereas a negative return in the year 2013 and 2008. The company has highest
return of 0.0066 in the year 2009 and lowest return of -0.0022 in the year 2008.
 Axis Bank Ltd has a positive return in the year 2017, 2016, 2013, 2012, 2010 and
-0.0018 in the year 2011.
 Asian Paints Ltd has a positive return in the year 2017, 2016, 2015, 2014, 2012,
2010 and 2009, whereas a negative return in the year 2013, 2011 and 2008. The
-0.0030 in the year 2013.
 Adani Port & Special Economic Zone Ltd has a positive return in the year 2017,
2016, 2014, 2013, 2012 and 2009, whereas a negative return in the year 2015,
58
2011, 2010 and 2008. The company has highest return of 0.0033 in the year 2014
and lowest return of -0.0047 in the year 2008.
59
CHAPTER 5
FINDINGS & CONCLUSION
5.1 FINDINGS
 Tata Consultancy Services Ltd, ONGC Ltd, NTPC Ltd, Maruti Suzuki India Ltd,
ITC Ltd, Hindustan Unilever Ltd, Hero Motocorp Ltd, HDFC Bank Ltd, Dr.
Reddys Laboratories Ltd, Bajaj Auto Ltd, Asian Paints Ltd, Adani Ports &
Special Economic Zone Ltd are the good companies to invest as they have
Highest return (companies having a positive return for a period of more than 5
years) with lowest beta (companies having beta less than one for a period of more
than 5 years).
 Yes Bank Ltd, Reliance Industries Ltd, HDFC Ltd are not so good companies to
invest as they have Lowest return (companies having a negative return for a
period of more than 5 years) with highest beta (companies having beta more than
one for a period of more than 5 years).
 Wipro Ltd, State Bank of India, Power Grid Corp of India Ltd, Mahindra &
Mahindra Ltd, Bharti Airtel Ltd are the companies where investors can make a
decision either to invest or not as these companies have moderate return(positive
return for exact 5 years) with lowest beta (Beta less than one for a period of more
than 5 years).
 Tata Steels Ltd, Tata Motors Ltd, Tata Motors Ltd – DVR, Larsen & Toubro Ltd,
Kotak Mahindra Bank Ltd, IndusInd Bank Ltd, ICICI Bank Ltd, Axis Bank Ltd
are the companies where investors can make a decision of either investing or not
as these are the companies with highest return (having positive return for a period
of more than 5 years) as well as highest Beta (having beta more than one for a
period of more than 5 years).
 Infosys Ltd and Coal India Ltd are the companies with lowest return (having
negative return for a period of less than 5 years) and lowest beta (having beta less
than one for a period of 5 years). These are not so good companies for
investment.
60
5.2CONCLUSION
The results obtained support to the linear structure of the CAPM equation being a good
explanation of security returns of BSE 30 companies over a period of 10 years.
Beta advices managers to calculate the risk involved in the investment and gives clear
information to interpret openly on obstacle price. Capital Asset pricing Model helps to
evaluate the risk and return of securities and provides a structure work to establish the
necessary price of return on benefit. This module is used to calculate market return and
risk for the companies, which helps to make decisions for investors to take investment.
The CAPM’s prediction for the intercept is that it should be equal to zero. From the
above calculated data we conclude that Tata Consultancy Services Ltd, ONGC Ltd,
NTPC Ltd, Maruti Suzuki India Ltd, ITC Ltd, Hindustan Unilever Ltd, Hero Motocorp
Ltd, HDFC Bank Ltd, Dr. Reddys Laboratories Ltd, Bajaj Auto Ltd, Asian Paints Ltd,
Adani Ports & Special Economic Zone Ltd are the good companies to invest as they have
Highest return (companies having a positive return for a period of more than 5 years)
with lowest beta (companies having beta less than one for a period of more than 5 years).
Finally, it is concluded saying that the CAPM is a significant model that can be used by
the investors while making investment decision and it was widely used over last many
decades. Using CAPM it is difficult to predict the beta of single asset, and the dispersion
of random combination of beta was quite low.
61
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CHAPTER 1

1.1 INTRODUCTION ABOUT THE INTERNSHIP

THE BOMBAY STOCK EXCHANGE OF INDIA LTD (BSE)

THE SECURITIES AND EXCHANGE BOARD OF INDIA LTD (SEBI)

NSE offer following segments :

FOCAL POINTS OF NSE

 Financial supporting heart surgery of poor children in TamilNadu.

 Providing scholarships to needy students on case basis.

 Sponsoring seminars/workshops conducted by students in various educational

 Providing educational and financial support to underprivileged children through CASP.

 Making sustainable contributions to the tsunami fund. Employees also participated by

 Employees participation in helping needy cases of surgery, treatment etc.

1.3.2 VISION, MISSION AND QYALITY POLICY

 Responsiveness to client needs;

1.3.3 PRODUCTS AND SERVICES

 EQUITIES (Broking Services through)

 DEPOSITORY SERVICES – NSDL

1.3.4 AREA OF OPERATIONS

1.3.6 COMPETITORS INFORMATION

• ICICI Direct Securities Ltd.

• Kotak Securities Ltd.

• Karvy Stock Broking Ltd.

• Mothilal oswal securities ltd.

• HDFC Securities Ltd.

• SMC Global Online

• Aditya Birla Money

Group is all-inclusive financial services and explanation supplier. Biggest non-banking

KOTAL SECURITIES LTD.

KARVY STOCK BORKING LTD.

MOTILAL OSWAL SECURITIES LTD.

ADITYA BIRLA MONEY

HDFC SECURITIES LTD.

SMC GLOBAL ONLINE SECURITIES LTD.

 30 years’ experience in the capital market

 Low publicity causes lack of awareness amongst investors.

 Growing rural market through modified and cheaper services.

 Strict economic measures by Government and RBI.

1.3.8 FUTURE GROWTH AND PROSPECTS

For the year For the year For the year

5) Profit before exceptional item and 740,416,720 545,308,565 1,010,473,806

CONCEPTUAL BACKGROUND & LITERATURE REVIEW

E(Ra) = RFR + β [E(Rm) – RFR]

E(Ra) = Expected Rate of Return on a hazardous resource.

RFR = Risk Free Rate

E(Rm) = Expected Market return

1CAPM equation is that of a straight line (y = mx + c)

Let’s plot this equation on a graph.

Cov(i,mkt) = covariance between the asset’s return and market return

σ_mkt^2 = standard deviation of market

Thus β is the standardized measure of systematic risk.

PROBLEMS WITH CAPM

 Unsystematic risk is assumed to be compensated by holding a well-diversified portfolio.

 Capital Asset Pricing Model generates a tentatively resulting correlation connecting

2.2 LITERATURE REVIEW

TOPIC CHOOSEN FOR THE STUDY:

“CAPM - AN EVALUATION OF RISK AND RETURN AT GEOJIT FINANCIAL

3.1 STATEMENT OF THE PROBLEM

3.2 NEED FOR THE STUDY

3.4 SCOPE OF THE STUDY