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FIBA SABYA

The document outlines a hypothetical investment strategy for MBA students at Amity Business School, recommending a diversified approach with Rs 10,00,000 allocated primarily to equity shares and mutual funds, considering a one-month investment horizon. It emphasizes the importance of understanding risk tolerance, investment goals, and the necessity of professional financial guidance due to market volatility. The proposed allocation includes 95% in equity shares and 5% in open-ended mutual funds, with specific stock selections and their projected profits detailed.

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Sabyasachi Bhattacharjee
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6 views

FIBA SABYA

The document outlines a hypothetical investment strategy for MBA students at Amity Business School, recommending a diversified approach with Rs 10,00,000 allocated primarily to equity shares and mutual funds, considering a one-month investment horizon. It emphasizes the importance of understanding risk tolerance, investment goals, and the necessity of professional financial guidance due to market volatility. The proposed allocation includes 95% in equity shares and 5% in open-ended mutual funds, with specific stock selections and their projected profits detailed.

Uploaded by

Sabyasachi Bhattacharjee
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 5

AMITY BUSINESS SCHOOL, KOLKATA

FIBA733- STRATEGIC FINANCIAL MANAGEMENT

SUBMITTED BY:
SABYASACHI BHATTACHARJEE
PROGRAM: MBA, SEMESTER 4
ENROLLMENT NO: A91801922087
FACULTY: DR. MANTA DEY
Assuming that Rs 10,00,000 is given to each student on 20th February, you have to invest the said
amount over a spread of portfolios (shares, debenture, derivatives, mutual fund, intraday trading etc)
with no locking period for a month except real estate and silver / gold. Your pattern of investment
can change only with supporting logic.

The amount to be invested = Rs 10,00,000

This scenario presents a hypothetical situation with inherent risks. Investing in a lump sum carries
market volatility risks, and replicating this strategy in real life is not recommended. Professional
financial guidance is crucial for making informed investment decisions.

Investment Considerations:

• Risk Tolerance and Investment Goals: Before outlining specific investments, it's essential to
understand the risk tolerance and investment goals of the students. Are they seeking short-term
gains, income generation, or long-term wealth accumulation?

• Investment Horizon: The one-month timeframe is highly restrictive for most investment
strategies. Ideally, investments should align with individual goals and risk tolerance.

• Diversification: Spreading the Rs 10 lakh across various asset classes (equity, debt, gold) is
crucial to mitigate risk. However, derivatives and intraday trading are generally not suitable for
beginners due to their high-risk nature.

Recommended Investment Approach:

Given the one-month timeframe and risk factors, a conservative approach focused on diversification
is advisable:

• Fixed Deposits (FDs): A portion of the funds could be allocated to FDs with reputable banks
or NBFCs (Non-Banking Financial Companies) for guaranteed returns and liquidity.

• Debt Mutual Funds: Low-risk debt mutual funds can offer slightly higher returns than FDs
while maintaining relative safety. Choose short-term debt funds for higher liquidity.
• Gold (Digital or ETFs): A small allocation to gold (through digital gold or Exchange-Traded
Funds) can provide a hedge against inflation and market volatility.

For this purpose the following asset classes are selected, with the following allocation of funds.
1. Equity Shares (95% / 9.5 lakh rupees)

2. Mutual Funds (5% / 50 thousand rupees)

This would be the ideal distribution of funds but since investment can be made only if there is no
lock in period, therefore mutual funds investment will be limited to open ended debt, hybrid and
equity mutual funds.

EQUITY SHARES

Stock Name Buying price Number of Investment Selling price Profit/Loss


(as on 21st shares amount (as on 21st
feb) march)

Axis Bank 1075 65 69875 1050 1625

Kotak Mahindra 1750 40 70000 1790 1600

Tata Steel 140 500 70000 151 5500

Hindustan 2394 29 69426 2259 3915


Unilever
ITC 400 175 70000 422 3850

Zomato 157 445 69865 171 6230

Hero MotoCorp 4508 15 67620 4545 555

Bajaj Finserv 1580 44 69520 1609 1276

Tata Motors 916 76 69616 969 4028

Maruti Suzuki 11370 6 68220 12000 3780

Pidilite 2711 25 67775 2908 4925


Stock Name Buying price Number of Investment Selling price Profit/Loss
(as on 21st shares amount (as on 21st
feb) march)

Bajaj Auto 8205 5 41025 8770 2825

HDFC Bank 1435 48 68880 1451 768

Sun 1533 46 70518 1570 1702


Pharmaceutical
s

Intraday not considered since time period for investment was fixed. Fixed investment with no plan
on selling the stocks before a month.

Total amount invested in equity shares = Rupees 942340 (approx 9.5 lakhs)
Profit = Rupees 31499

MUTUAL FUNDS

Open-ended debt, hybrid and equity mutual funds have no lock-in period, except for ELSS schemes
under the equity category. We can sell mutual funds without a lock-in period at any time.
Higher expense ratio means that a larger portion of returns will be deducted as fees, thereby
reducing overall returns.

Mutual Funds Expense Ratio Risk

ICICI Prudential Liquid Fund (G) 0.29 Moderate Risk

Axis Liquid Fund (G) 0.23 Low to Moderate Risk


The combination of stocks and mutual funds were selected to diversify the investment made. Stocks
selected were large and mid cap. This was done to ensure stable returns. For the mutual funds, I
invested 25 thousand in each of the mutual funds. Since we have no lock in period thus these open
ended debt, hybrid and equity mutual funds were selected based on their expenses ratio, risk
category. Low to moderate risk mutual funds were selected since investment period is short.

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