Page 319 - DMGT207_MANAGEMENT_OF_FINANCES

Management of Finances

Notes  The shares are issued like the new issues of any other company, listed and quoted on a
stock exchange

 The shares of closed-end funds are not redeemable at their NAV as in the case of open-end
funds
 These shares are traded in the secondary market on a stock exchange

 The minimum amount of the fund is 20 crores or 60% of targeted amount

Example: HSBC Small Cap Fund, Birla Sun Life Pure Value fund, Canara Robeco Multicap
etc.
Open-end mutual funds: Open-end mutual funds are commonly referred to as the mutual funds.
The key characteristics of open ended mutual funds are as follows:

 Mutual funds do not have a fixed capitalisation
 It sells its shares to the investing public, whenever it can at their Net Asset Value per share
(NAV) and stands ready to repurchase the same directly form the investing public at the
net asset value per share
 Minimum amount of the fund is 50 crores or 60% of targeted amount.

Example: UTI Unit 64, Kothari Pioneer, Prima and LIC Schemes.

Credit Rating Agencies

According to SEBI, “rating” means an opinion regarding securities, expressed in the form of
standard symbols or in any other standardised manner, assigned by a credit rating agency and
used by the issuer of such securities, to comply with a requirement specified by these regulations.
A credit rating estimates the credit worthiness of an individual, corporation, or even a country.
It is an evaluation made by credit bureaus of a borrower’s overall credit history.

Did u know? The main credit rating agencies operating in India are:
 Credit Rating Information Services of India Limited (CRISIL)
 Investment Information and Credit Rating Agency of India (ICRA)
 Credit Analysis & Research Limited (CARE)
 Duff & Phelps Credit Rating India Private Ltd. (DCR India)
 ONICRA Credit Rating Agency of India Ltd.
Credit Reporting and Debt Collection: Though the Credit Reporting and Debt Collection is
more in scattered form, it includes companies like that of:
 Trustman Credit Management Services
 Pankaj Saraf

Insurance Companies

Insurance companies are in the business of assuming risk on behalf of their customers in exchange
for a fee, called a premium. Insurance companies make a profit by charging premiums that are
sufficient to pay the expected claims to the company plus a profit.

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