CHAPTER -3. REOSURCE MOBILIZATION PATTERNS AND PROJECTIONS FOR MUTUAL FUND INDUSTRY IN INDIA Contents: 3.0. Introduction 72

CHAPTER 3 REOSURCE MOBILIZATION PATTERNS AND PROJECTIONS OR MUTUAL UND INDUSTRY IN INDIA Contents: 3.0. Introduction 72 3.1. of Resource Mobilization 73 3.2. Overview of Resource Mobilization in India 3.2.a. Schemewise analysis 75 3.2.b. Analysis of Purchases and Sales 75 3.3. Trends in Resource Mobilization 3.3.a. Gross Resource Mobilization 77 3.3.b. Redemption and Repurchases 78 3.3.c. Net flows 78 3.4. Resource Mobilization of Major Banks and financial institutions 3.4.a. Bank sponsored Institutes 81 3.4.b. I sponsored Institutes 81 3.5. actors Influencing Gross Resources Mobilized 85 3.5.b. Regression Model for Public Sector(other than UTI) 93 3.5.c. Regression Model for Unit Trust of India 101 3.6. indings and Conclusion 112 71

3.0. Introduction The mutual fund industry in India was started in 1963 with the formation of Unit Trust of India (UTI), at the initiative of the government of India and Reserve Bank. The history of mutual funds in India can be broadly divided into four phases 1. In the first phase (19641987) UTI has enjoyed the status of monopoly in the mutual fund industry. In the second phase (19871993) some public sector mutual funds set up by the public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) were launched besides the UTI.. In the third phase (1993 2003) the government allowed private players to offer mutual fund schemes giving the Indian investors a wider choice of fund families. In the fourth phase, since ebruary, 2003 following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. This chapter is intended to examine the patterns and trends in resource mobilization by mutual fund industry during post liberalization period i.e. 19932009, in India and aims at future projections and place of India in the global context. The second objective of this chapter is to assess the impact of various factors influencing mutual funds in private sector and public sector. Regression equation technique is used to estimate the impact adopting the multiple regression technique for private sector, pubic sector and Unit Trust of India separately. 1. This classification was made and published in virtual edition of Association of Mutual unds in India (AMI) Web site. 72

3.1. of Resource Mobilization: It is evident that the Indian mutual fund industry is now in a severe competitive environment. Because there are 40 market players offering various schemes in private as well as public sector. As per chapter1, the role of UTI is only decimal with 8 per cent by the end of 200708 and the mutual funds offered in the private sector have been gaining more market share and attracting huge response from investors. The results showing that its market share is only 2 per cent in 199394 and raised to 85 per cent by the end of 200708. Thus, gross resource mobilization varies according to the nature of organization and schemes offered by them. There will be other influencing factors like household investments in banks, insurance funds, mutual funds and share market etc. Even foreign institutional investors are also playing a vital role in the resource mobilization of the mutual funds in India. Hence, it is necessary to examine the place of India in net resource mobilization and projection for the year 2020. India s place: The forecast results shown in table3.1 indicate that the India s share of total net resource mobilized in the word, will be improving to 0.40 per cent by the year 2020, from 0.11 per cent in 2000. America group share will be declined to 37.2 per cent by 2020 as against its share which was 62.5 per cent in 2000. Even European countries share is also expected to decline by 9 per cent and Asia Pacific region share is expected to decline by 3 per cent by the year 2020. 73

Table 3.1. TRENDS & PROJECTIONS OR GLOBAL NET RESOURCES MOBILIZED BY MUTUAL UNDS ( USD MILLIIONS) COUNTRY/ 2000 per 2001 per 2002 per 2003 per 2004 per 2005 per 2006 per 2007 per 2020 per YEAR cent cent cent cent cent cent cent cent cent WORLD 11871028 100 11654866 100 11324128 100 14048311 100 16164793 100 17771027 100 21823455 100 26199448 100 45505559 100 AMERICA: 7424112 62.5 7433106 63.7 6776289 59.8 7969541 56.7 8792450 54.3 9763921 54.9 11485012 52.6 13442653 51. 15271177 33.6 EUROPE: 3296016 27.7 3167965 27.1 3463000 30.6 4682836 33.3 5640450 34.8 6002261 33.7 7744204 35.4 8983244 34.2 8273896 18.8 Asia and 2233979 30.09 1039236 13.98 1063857 15.70 1361473 17.08 1677887 19.0 1939251 19.86 2456511 21.39 3678330 276 4579443 Pacific 26.8 India 13507 0.11 15284 0.13 20634 0.18 29800 0.21 32846 0.20 40546 0.23 58219 0.27 108582 0.1 183591 0.40 South Africa 16921 0.14 14561 0.12 20983 0.19 34460 0.25 54006.00 0.33 65594 0.37 78026 0.36 95221 0.3 200878 0.44 Source: Investment Company Institute, USA. Note: percentages are representing respective country s share in world mutual funds. 74

3.2. OVERVIEW O RESOURCE MOBILIZATION IN INDIA: In the foregoing paragraphs, we have observed India s place and expected progress by the year 2020. Now, it is necessary to examine expected growth in schemewise resource mobilization besides examining the past trends in private sector and public sector. 3.2.a. of Schemewise Analysis: The net inflows i.e. difference between sales and purchases made by mutual fund organizations varies in accordance with demand and redemptions by the investors of the schemes. More demand leads to more inflows and more redemptions leads more outflows. Hence, it is necessary to examine the fluctuations in demand and redemptions by investors otherwise called as sales and purchases by mutual fund organizations in accordance with respective schemes. 3.2.b. Purchases and Sales for various Schemes: Table 3.2 indicates schemewise mobilization by mutual funds in India. The data reveals that a similar trend in to sales and purchases made by investors during 20012008. The 94 per cent of market share of mutual funds is relating to openend schemes in 2001, and it is increased to 97 per cent in the year 200708. It was observed that the liquid and money market schemes have gone significantly from 40 per cent in the year 200001 to 77 per cent by the year 200708. In case of Debt (other than assured return) is declined from 24 per cent in year 200001 to 20 per cent by the year 20078. Investors have shown least preference to assured return schemes in the debt funds. Gold exchange traded fund and other exchange traded funds are just commenced in the year 200708. 75

TABLE 3.2: Schemewise Resource Mobilization by mutual funds during 20002008 Scheme 200001 200405 200708 Sale Purchase Net Sale Purchase Net Sale Purchase Net Openend 78788 91106 12318 822004 825977 3972 4337042 4203588 133454 (94) (98) (98) (99) (97) (98) Closeend 5042 1851 3190 17704 11531 6173 127335 106987 20348 (6) (2) (2) (1) (3) (2) Total 83829 92957 9128 839708 837508 2200 4464376 4310575 153802 (100) (100) (100) (100) (100) (100) (100) (100) (100) A. Income/ Debt Oriented i. Liquid/Money 33648 36212 2564 638594 6282426 10348 3432737 3417761 14976 Market (40) (39) (76) (75) (77) (79) ii. Gilt 4472 4161 312 4361 5706 1345 3180 2746 434 (5) (4) (1) (1) (0) (0) iii. Debt (other than 20173 26060 588 155719 169966 881346 792889 88457 assured return) (24) (28) (19) (20) 14247 (20) (18) iv. Debt (assured 1662 614 1048 0 0 0 0 0 0 return) (2) (1) B. Growth/Equity oriented i. ELSS 656 (1) ii. Others 18299 (22) 214 442 155 349 194 6448 297 6151 17997 303 37216 29832 (19) (4) (4) 7294 119839 79056 40782 (4) (3) C. Balanced Schemes 4919 (6) D. Exchange Traded unds 7701 (8) 2782 3755 3410 345 11488 5720 5768 9339 12016 2767 i. Gold ET 433 156 276 II. Other ET 8906 11950 3043 TOTAL 83829 92957 9128 839708 837508 2200 4464376 4310575 153802 A+B+C+D 76

3.3. TRENDS IN RESOURCE MOBILIZATION 2 : The data is presented in relation to gross mobilization, redemption and repurchases and net flows of resources which are presented in Table 3.3. 3.3.a. Gross Resource Mobilization: The table gives a clear picture of changing patterns of resource mobilization by various organizations in India. Private Sector :. It is known fact that private sector was entered in Indian mutual fund industry from the year 1993 onwards. The highest contribution is 91 per cent achieved in the year 200304 by the private sector. Hence, its impact on public sector was marginal up to the year 199899. However, private sector is gaining more market share and attracting huge response from investors, as the results showing that its market share is only 2 per cent in 199394 and raised to 85 per cent by the end of 200708. Public sector (other than UTI) : The data includes bank sponsored organizations and financial institutions. This sector has shown consistency in performance during 19932008 on average market share of 8 per cent. But highest contribution in the market share in 199394 is 57 per cent. Unit Trust of India: A sudden collapse in the contribution by UTI was observed in the year 199899. Now, the role of UTI is only decimal with 8 per cent by the end of 200708. The highest contribution made by UTI was in the year 199596, which is 91 per cent. It was found that the role of UTI has been drastically declined to 8 per cent in 200708. 2 Here, resource mobilization includes Gross resources, redemptions and repurchase and net resources mobilized by mutual funds in India. 77

3.3.b. Redemption and Repurchases: Private Sector: The redemptions from private sector organizations during 200108 is very high as it is on average more than 80 per cent of the total redemptions in respective years. Public Sector Organizations (other than UTI): In this sector, the redemptions were ranging between 5 per cent to 11 per cent of the total redemptions. Unit Trust of India: The results indicate that majority of redemptions including repurchases are made by UTI in the year 199899. Later the redemption of UTI very nominal on average it is 4 per cent to 8 per cent of total redemption during the period 2001 to 2008. 3.3.c. Net flows: Private Sector : The data indicates all positive cash flows during the study period. It indicates that there is no excess of redemptions over gross resources mobilized during the period 19932008. Public sector(other than UTI): Negative cash flows indicated in the years 1999 2000, 200001 and 200405. This is an indication of investors attitudes towards public sector mutual funds during the said period. Most of the investors were withdrawn their investments from the public sector organizations(other than UTI). Unit Trust of India: Negative flows observed during the years 199899, 200102, 200203 and 200405. It was already stated that the role of UTI was significantly decreased due to loss of investors confidence from the year 1999 onwards. 78

Table 3.3. TRENDS IN RESOURCE MOBILIZATION BY MUTUAL UNDS (Rs. Crore) YEAR Gross Mobilisation Redemption Net flows Private Public UTI Total Private Public UTI Total Private Public UTI Total Sector Sector Sector Sector Sector Sector 199394 1549 9527 5100 16726 1549 9527 5100 16726 199495 2084 2143 9500 13727 2084 2143 9500 13727 199596 312 296 5900 6508 312 296 5900 6508 199697 346 151 4280 4777 346 151 4280 4777 199798 1974 332 9100 11406 1974 332 9100 11406 199899 7847 1671 13193 22710 6394 1336 15930 23660 1453 335 2737 949 199900 43726 3817 13698 61241 28559 4562 9150 42271 15166 745 4548 18970 200001 75009 5535 12413 92957 65610 6580 12090 83829 9850 1045 323 9128 200102 147798 12082 4643 164523 134748 10673 11927 157348 13050 1409 7284 7175 79

200203 284096 23515 7096 314706 272026 21954 16530 310510 12069 1561 9434 4196 200304 534649 31548 23992 590190 492105 28951 22326 543381 42545 2597 1667 46808 200405 736463 59589 46656 839708 728864 59266 49378 835708 7600 2677 2722 2200 200506 914703 110319 73137 1098149 871727 103940 69704 1045370 42977 6379 3424 52779 200607 1599873 196340 142280 1938493 1520836 188719 134954 1844508 79038 7621 7326 93985 200708 3780753 346126 337498 4464376 3647449 335448 327678 4310575 133304 10677 9820 153802 80

3.4. RESOURCE MOBILIZATION AND MAJOR BANKS AND INANCIAL INSTITUTIONS: Table 3.4 represents role of various financial intermediaries like banks and financial institutions in mobilizing mutual funds during 198788 to 200809. State Bank of India, Canara Bank, Indian Bank, BOI, Punjab National Bank and Bank of Baroda are major market players among banksponsored mutual funds. GIC, LIC and IDBI are major players in inancial Institutions sponsored groups. 3.4.a. Bank Sponsored Institutions: SBIM has shown positive contribution throughout the period except in the year 199899. The year 200506 can be stated as best year which has highest achievement made by SBIM. Canara Robeco has made significant outflows during the years 199899, 19992000 and 200001, 200405 and 200607. Indian Bank, BOIM, PNBM have shown only positive contribution to resource mobilization. 3.4.b. I Sponsored Institutions: GICM has made redemptions and repurchases from the year 199697 to 200304. the negative values during the period indicates excess of cash outflows to cash inflows. In case of LICM negative flows are made in the year 200405. Overall the year 200405 has shown a negative flow of 2677 crores. This indicates most of the investors had withdrawn their resources from the bank sponsored and I sponsored institutions. 81

Table 3.4: NET RESOURCES MOBILIZED BY BANKSPONOSRED & I SPONSORED MUTUAL UNDS (Rs. Crore) Year BANK SPONSORED I SPONSORED TOTAL SBIM Canara Robeco Indian Bank M BOI M PNB M Baroda Pioneer M GIC M LIC M IDBI M 199192 525 1268 127 73 147 198 230 2568 199293 1041 16 117 5 25 371 389 1964 199394 105 43 227 11 387 199495 218 206 94 54 156 38 320 69 187 1342 199596 76 3 10 24 65 117 53 348 199697 3 2 2 32 169 143 199798 190 47 19 100 123 441 199899 72 17 268 348 211 458 199900 659 361 40 2 43 285 279 631 200001 252 5 2 0 56 566 750 1521 200102 614 140 50 59 97 640 178 1270 200203 686 237 14 96 147 578 380 1895 200304 1927 495 1841 263 33 934 5313 200405 1024 11 307 2677 3351 200506 5280 56 29 2112 7477 200607 3208 96 79 4226 7258 200708 7339 295 152 2178 9965 200809 2617 1317 256 5954 10443 Source: Respective Mutual unds. Note: Data for 200809 are provisional. M: Mutual und. SBI State Bank of India. PNB Punjab National Bank.BOI Bank of India. 82

3.5. ACTORS INLUENCING GROSS RESOURCES MOBILIZED: The main objective of this chapter is to find impact of factors influencing gross resource mobilization by various sectors. This is estimated through deriving different regression equations for private sector, UTI and public sector (other than UTI). The data is taken from hand book on Indian stock markets published by SEBI, 2009. Dependent variable for different models: Model 1: Dependent Variable: Gross Resource Mobilized by Private Sector Mutual funds Model2: Dependent Variable: Gross Resource Mobilized by Public Sector Mutual funds(other than UTI) Model3: Dependent Variable: Gross Resource Mobilized by Unit Trust of India. Reasons for considering Independent Variables for all three models : X1: Turnover Ratio of BSE: Higher turnover leads to decrease in gross mobilization by mutual fund organization. X2: Volatility Index Value of BSE Sensex: Higher volatility indicates more fluctuations in the stock market, as it indicates standard deviation of the sensex transaction. X3: Volatility Index Value of BSE 100 Index: This indicates standard deviation of BSE 100 Index. Thus major 100 companies will influence the resource mobilization patterns among investors. 83

X4: II Investment (Rs. Crores): oreign institutional investors also influence the resource mobilization by the mutual fund organization. Hence, increase or decrease in II Investments is expected to have significant impact. X5: House hold savings percent of insurance funds: This represents proportion of savings in insurance funds, this is expected to influence mobilization of private and public sector funds. X6: House hold savings per cent in public sector other than UTI mutual funds.: The increase in saving percent of investment in public sector other than UTI will influence private sector and UTI mutual funds X7: Household savings in shares and debentures: The changing attitude of investors towards shares and debentures is expected to have significant impact on their interest towards investment in mutual funds X8: Household savings in bank deposits: Investors attitude to have more liquid money in bank deposits is expected to have direct and significant impact on gross resource mobilization. Methodology: We have selected eight independent variables which can substantially influence the dependent variable i.e., Gross Resource Mobilization by private sector, public sector (other than UTI) and Unit Trust of India. Different regression results are considered for testing significance, for instance equations for X1; X1 and X2; X1 to X3; X1 to X4; X1 to X5; X1 to X6; X1 to X7 and X2 to X8; respectively. inally the equation having highest R 2 value and lower value is considered as the best model. This exercise is conducted separately for three models. 84

3.5.a. Regression Model of Private Sector Mutual unds: Table 3.5 provides the basic data for private sector mutual funds. Table 3.6 indicates regression results of various equation using different combinations of independent variables and table 3.7 provides summary of all these equations. Table3.8 is allotted for optimum model and finally correlation among all the variables is given in Table3.9. Year Gross resource mobilized TABLE 3.5: BASIC DATA OR PRIVATE SECTOR MUTUAL UNDS Turnov er Ratio X1 Volatil ity BSE index X2 BSE 100 Index X3 II Investment (Rs.Crore) X4 House holding savings in Insuranc e funds (per cent) X5 House holding savings in Mutual funds (other than UTI) (percent) X6 House holding savings in Shares and debentures (percent) 199900 43726 75.2 1.72 2.23 10122 12.1 3.4 7.7 36.3 200001 75009 175 1.72** 2.23** 9934 13.6 1.3 4.1 41 200102 147798 50.2 1.5 1.6 8755 14.2 18 2.7 39.4 200203 284096 54.9 1.01 0.99 2689 16.1 1.3 1.7 40.9 200304 534649 41.9 1.35 1.52 45765 13.7 1.2 0.1 38.3 200405 736463 30.5 1.48 1.73 45881 16 0.4 1.1 37 200506 914703 27 1.03 0.99 41467 14.2 3.6 4.9 47.1 200607 1599873 27 1.75 1.86 30840 15 4.8 6.3 55.7 200708 3780573 30.7 1.93 2.20 66179 15.5* 5.0* 6.1* 52* House holding savings In bank deposits (percent) * provisional values. **: Assumed as same trend as data is not available in SEBI handbook. Source: Hand book on Indian stock markets, SEBI, 2009. 85

Table 3.6 : REGRESSION RESULTS USING VARIOUS EQUATIONS OR PRIVATE SECTOR MUTUAL UNDS Equation 1: SUMMARY OUTPUT OR X1 Multiple R 0.43302 R Square 0.18751 Adjusted R Square 0.07144 Error 1145598 df SS MS Regression 1 2.1201E+12 2.12E+12 1.61547 0.2443 Residual 7 9.1868E+12 1.312E+12 Total 8 1.1307E+13 Error t Stat Pvalue Lower 95% 95% Lower Intercept 1524494 621114.807 2.4544478 0.04382 55791 2993197 55790.77 2993197 X Variable 1 10936 8604.08473 1.271013 0.24433 31281 9409.528 31281.33 9409.528 Table value of t 1 degree of freedom at 5% level significance is 12.71 Table value of at (1,7) at 5 % level is 5.59 Equation2: SUMMARY OUTPUT OR X1, X2 Multiple R 0.72161 R Square 0.52072 Adjusted R Square 0.36096 Error 950362 df SS MS Regression 2 5.8878E+12 2.944E+12 3.25943 0.1101 Residual 6 5.4191E+12 9.032E+11 Total 8 1.1307E+13 Error t Stat Pvalue Lower 95% 95% Lower Intercept 2E+06 1597427.18 0.978906 0.36543 5E+06 2345032 5472495 2345032 X Variable 1 14540 7352.64765 1.977513 0.09535 32531 3451.322 32531.24 3451.322 X Variable 2 2197239 1075802.87 2.0424174 0.08715 435156 4829633 435156.2 4829633 Table value of t 2 degree of freedom at 5% level significance is 4.30 Table value of at (2,6) at 5 % level is 5.14 86

Equation 3: SUMMARY OUTPUT X1,X2,X3 Multiple R 0.76921 R Square 0.59168 Adjusted R Square 0.34669 Error 960917 df SS MS Regression 3 6.6901E+12 2.23E+12 2.41512 0.1823 Residual 5 4.6168E+12 9.234E+11 Total 8 1.1307E+13 Error t Stat Pvalue Lower 95% 95% Lower Intercept 3E+06 2300886.63 1.343503 0.23686 9E+06 2823370 9005865 2823370 X Variable 1 7211.2 10820.4647 0.666441 0.53464 35026 20603.69 35026.09 20603.69 X Variable 2 6640678 4889374.61 1.3581855 0.23247 6E+06 19209215 5927860 19209215 X Variable 3 3E+06 3490882.28 0.932156 0.39404 1E+07 5719552 12227645 5719552 Table value of t 3 degree of freedom at 5% level significance is 3.18 Table value of at (3,5) at 5 % level is 5.41 Equation 4: SUMMARY OUTPUT OR X1,X2,X3,X4 Multiple R 0.90229 R Square 0.81413 Table value of t 4 degree of freedom at 5% level Adjusted R Square 0.62826 Error 724848 significance is 2.78 Table value of at (4,4) at 5 % level is 6.39 df SS MS Regression 4 9.2053E+12 2.301E+12 4.38009 0.0908 Residual 4 2.1016E+12 5.254E+11 Total 8 1.1307E+13 Error t Stat Pvalue Lower 95% 95% Lower Intercept 4E+06 1755767.84 2.091084 0.1047 9E+06 1203335 8546251 1203335 X Variable 1 4141.88 9671.92163 0.4282373 0.69053 22712 30995.44 22711.68 30995.44 X Variable 2 6699105 3688295.19 1.8163148 0.14349 4E+06 16939454 3541244 16939454 X Variable 3 4E+06 2650449.04 1.476407 0.21388 1E+07 3445686 11271967 3445686 X Variable 4 33.3808 15.2566307 2.1879557 0.09391 8.9784 75.74003 8.978365 75.74003 87

Equation 5: SUMMARY OUTPUT X1,X2,X3,X4,X5 Multiple R 0.91236 R Square 0.83239 Adjusted R Square 0.55305 Error 794799 df SS MS Regression 5 9.4118E+12 1.882E+12 2.9798 0.1989 Residual 3 1.8951E+12 6.317E+11 Total 8 1.1307E+13 Error t Stat Pvalue Lower 95% 95% Lower Intercept 6E+06 4146873.29 1.391757 0.25823 2E+07 7425760 18968643 7425760 X Variable 1 3090.88 10763.4262 0.287165* 0.79268 31163 37344.91 31163.15 37344.91 X Variable 2 5588018 4486893.39 1.2454092 0.30139 9E+06 19867316 8691279 19867316 X Variable 3 3E+06 3321089.5 0.901557 0.43374 1E+07 7575037 13563341 7575037 X Variable 4 30.7692 17.341332 1.7743294 0.17411 24.419 85.95709 24.41862 85.95709 X Variable 5 161072 281715.954 0.571752 0.60752 735474 1057618 735474.2 1057618 Table value of t 5 degree of freedom at 5% level significance is 2.57 Table value of at (5,3) at 5 % level is 9.01 88

Equation 6: SUMMARY OUTPUT X1,X2,X3,X4,X5,X6 Multiple R 0.91574 R Square 0.83859 Adjusted R Square 0.35434 Error 955275 df SS MS Regression 6 9.4818E+12 1.58E+12 1.73174 0.4103 Residual 2 1.8251E+12 9.126E+11 Total 8 1.1307E+13 Error t Stat Pvalue Lower 95% 95% Lower Intercept 5E+06 5155972.8 1.048462 0.40444 3E+07 16778517 27590204 16778517 X Variable 1 2895.08 12955.9553 0.2234554 0.84393 52850 58640.06 52849.9 58640.06 X Variable 2 6817797 6985340.88 0.976015 0.43199 2E+07 36873293 23237699 36873293 X Variable 3 4E+06 4926606.63 0.770099 0.52177 2E+07 17403501 24991454 17403501 X Variable 4 27.682 23.6357561 1.1711906 0.36217 74.014 129.3784 74.01447 129.3784 X Variable 5 117485 373376.009 0.3146571 0.78281 1E+06 1723993 1489022 1723993 X Variable 6 25925 93598.0208 0.276986 0.80779 428645 376794.4 428645.2 376794.4 Table value of t 6 degree of freedom at 5% level significance is 2.37 Table value of at (6,2) at 5 % level is 19.33 89

Equation 7: SUMMARY OUTPUT OR X1,X2,X3,X4,X5,X6,X7 Multiple R 0.958486229 R Square 0.91869585 Adjusted R Square 0.349566804 Error 958799.984 df SS MS Regression 7 1.04E+13 1.48E+12 1.614214 0.542949 Residual 1 9.19E+11 9.19E+11 Total 8 1.13E+13 Error t Stat Pvalue Lower 95% 95% Lower Intercept 7555429.429 5609825 1.34682 0.406594 7.9E+07 63724155 7.9E+07 63724155 X Variable 1 4882.667436 13157.02 0.371108 0.773775 162293 172058.4 162293 172058.4 X Variable 2 3181163.222 7910615 0.402139 0.756589 9.7E+07 1.04E+08 9.7E+07 1.04E+08 1905120.691 5298284 0.35957 0.780253 6.9E+07 65415956 6.9E+07 65415956 X Variable 3 X Variable 4 35.78077811 25.08678 1.42628 0.38928 282.977 354.5386 282.977 354.5386 X Variable 5 335025.4857 434130 0.771717 0.581578 5181120 5851171 5181120 5851171 X Variable 6 11125.24686 101086.9 0.110056 0.930217 1273305 1295555 1273305 1295555 X Variable 7 186195.4555 187577.1 0.992634 0.502353 2197197 2569588 2197197 2569588 Table value of t 7 degree of freedom at 5% level significance is 2.14 Table value of at (7,1) at 5 % level is 236.8 90

EQUATION NO. Table 3.7 : SUMMARY O VARIOUS REGRESSION EQUATIONS No. of Independent variables PRIVATE SECTOR MUTUAL UNDS Multiple R R SQUARE Adjusted Value Considered R 2 YES/NO Eq1 1 0.43 0.18 0.07 2.61 No Eq2 2 0.72 0.52 0.36 3.25 Yes Eq3 3 0.76 0.59 0.34 2.41 Yes Eq4 4 0.90 0.81 0.62 4.38 Yes Eq5 5 0.91 0.83 0.55 2.97 Yes Eq6 6 0.91 0.83 0.35 1.73 Yes Eq7 7 0.95 0.91 0.34 1.64 Yes Eq8* 7 0.95 0.91 0.30 1.50 Yes * or independent variable x2 to x8 see the following table: Table 3.8: OPTIMUM MODEL OR PRIVATE SECTOR MUTUAL UNDS Equation 8: SUMMARY OUTPUT OR X2 TO X8 Multiple R 0.955682 R Square 0.913327 Adjusted R Square 0.306619 Error 989948.5 df SS MS Regression 7 1.03E+13 1.48E+12 1.505381 0.558105 Residual 1 9.8E+11 9.8E+11 Total 8 1.13E+13 Error t Stat Pvalue Lower 95% 95% Lower Intercept 8032541 6479251 1.23973 0.432117 9E+07 74294147 9E+07 74294147 X Variable 2 495823 13395413 0.03701 0.976447 1.7E+08 1.7E+08 1.7E+08 1.7E+08 X Variable 3 782862.8 8816018 0.0888 0.943616 1.1E+08 1.13E+08 1.1E+08 1.13E+08 X Variable 4 31.52353 22.11665 1.42533 0.38948 249.495 312.5422 249.495 312.5422 X Variable 5 349798.9 449310.1 0.778524 0.578871 5359227 6058824 5359227 6058824 X Variable 6 29970.1 136097 0.220211 0.862011 1699307 1759247 1699307 1759247 X Variable 7 130372 258957 0.50345 0.703078 3159989 3420733 3159989 3420733 X Variable 8 40050 154437.9 0.259328 0.838465 1922269 2002369 1922269 2002369 Table value of t 7 degree of freedom at 5% level significance is 2.14 Table value of at (7,1) at 5 % level is 236.8 91

Optimum Regression Model: The optimum regression result indicate that f value 1.50 and r square value.91. Hence, it can be stated this is best model which is considered based on five independent variables excluding stock turnover ratio. All t values are less than table value and statistically insignificant. Table 3.9: CORRELATION COEICIENTS AMONG THE VARIABLES Gross Resource Mobilization X1 X2 X3 X4 X5 X6 X7 X8 Gross Resource Mobilization 1 X1 0.43302 1 X2 0.456453 0.239996 1 X3 0.26488 0.435206 0.956562 1 X4 0.773378 0.54014 0.215294 0.094175 1 X5 0.430689 0.43249 0.21698 0.37153 0.316338 1 X6 0.02118 0.15735 0.137664 0.002831 0.23418 0.11188 1 X7 0.350778 0.078486 0.544133 0.509828 0.01218 0.3883 0.096656 1 X8 0.7436 0.3221 0.283912 0.056602 0.425071 0.341022 0.056053 0.49858 1 Interpretation: The results indicate that there is a negative correlation between the following variables: a. turnover ratio and gross resource mobilized by private sector mutual funds. b. Household savings in mutual funds other than UTI and gross resource mobilized by private sector mutual funds. 92

3.5.b. Regression Model of Public Sector (other than UTI) Mutual unds: Table3.10 provides the basic data for public sector mutual funds(other than UTI). Table3.11 indicates regression results of various equation using different combinations of independent variables and table3.12 provides summary of all these equations. Table3.13 is allotted for optimum model and finally correlation among all the variables is given in Table3.14. Year TABLE 3.10: BASIC DATA OR PUBLIC SECTOR (other than UTI) MUTUAL UNDS Gross BSE 100 resource Index mobilized X3 Turnov er Ratio X1 Volatility BSE Sensex X2 II Investme nt (Rs.Cror e) X4 House holding savings Insurance funds (per cent) X5 House holding savings Mutual funds (other than UTI) (percent) X6 House holding savings in Shares and debentures (percent) X7 199900 3817 75.2 1.72 2.23 10122 12.1 3.4 7.7 36.3 200001 5535 175 1.72** 2.23** 9934 13.6 1.3 4.1 41 200102 12082 50.2 1.5 1.6 8755 14.2 18 2.7 39.4 200203 23515 54.9 1.01 0.99 2689 16.1 1.3 1.7 40.9 200304 31548 41.9 1.35 1.52 45765 13.7 1.2 0.1 38.3 200405 59589 30.5 1.48 1.73 45881 16 0.4 1.1 37 200506 110319 27 1.03 0.99 41467 14.2 3.6 4.9 47.1 200607 196340 27 1.75 1.86 30840 15 4.8 6.3 55.7 200708 346126 30.7 1.93 2.20 66179 15.5* 5.0* 6.1* 52* * provisional values. **: Assumed as same trend as data is not available in SEBI handbook. Source: Hand book on Indian stock markets, SEBI, 2009. House holding savings In bank deposits (percent) X8 93

Table 3.11: REGRESSION RESULTS USING VARIOUS EQUATIONS OR PUBLIC SECTOR (OTHER THAN UTI) MUTUAL UNDS Equation 1: SUMMARY OUTPUT OR X1 Multiple R 0.45336557 R Square 0.20554034 Adjusted R Square 0.0920461 Error 110027.555 df SS MS Regression 1 2.19E+10 2.19E+10 1.81102 0.22034 Residual 7 8.47E+10 1.21E+10 Total 8 1.07E+11 Error t Stat Pvalue Lower 95% 95% Lower Intercept 150966.702 59654.23 2.530696 0.039193 9906.863 292026.5 9906.863 292026.5 X Variable 1 1112.07907 826.369 1.34574 0.22034 3066.13 841.9732 3066.13 841.9732 Table value of t 1 degree of freedom at 5% level significance is 12.71 Table value of at (1,7) at 5 % level is 5.59 Equation 2: SUMMARY OUTPUT OR X1,X2 Multiple R 0.72679449 R Square 0.52823023 Adjusted R Square 0.37097364 Error 91580.7056 df SS MS Regression 2 5.63E+10 2.82E+10 3.359034 0.105 Residual 6 5.03E+10 8.39E+09 Total 8 1.07E+11 Error t Stat Pvalue Lower 95% 95% Lower Intercept 144210.24 153934.4 0.93683 0.385005 520874 232453.7 520874 232453.7 X Variable 1 1456.56011 708.5304 2.05575 0.085558 3190.27 277.1512 3190.27 277.1512 X Variable 2 210015.164 103668.6 2.025831 0.089177 43652.9 463683.2 43652.9 463683.2 Table value of t 2 degree of freedom at 5% level significance is 4.30 Table value of at (2,6) at 5 % level is 5.14 94

Equation 3: SUMMARY OUTPUT OR X1,X2,X3 Multiple R 0.80119084 R Square 0.64190677 Adjusted R Square 0.42705083 Error 87403.2559 df SS MS Regression 3 6.85E+10 2.28E+10 2.987615 0.134684 Residual 5 3.82E+10 7.64E+09 Total 8 1.07E+11 Error t Stat Pvalue Lower 95% 95% Lower Intercept 331995.37 209284.4 1.58634 0.173523 869978 205987.3 869978 205987.3 X Variable 1 555.599617 984.2094 0.56451 0.596788 3085.59 1974.391 3085.59 1974.391 X Variable 2 756269.262 444728.4 1.700519 0.149777 386942 1899480 386942 1899480 X Variable 3 400036.076 317524.2 1.25986 0.263324 1216258 416185.8 1216258 416185.8 Table value of t 3 degree of freedom at 5% level significance is 3.18 Table value of at (3,5) at 5 % level is 5.41 Equation 4: SUMMARY OUTPUT OR X1,X2,X3,X4 Multiple R 0.90400621 R Square 0.81722723 Adjusted R Square 0.63445446 Error 69813.6437 df SS MS Regression 4 8.72E+10 2.18E+10 4.471275 0.088006 Residual 4 1.95E+10 4.87E+09 Total 8 1.07E+11 Error t Stat Pvalue Lower 95% 95% Lower Intercept 382025.395 169106.5 2.25908 0.086769 851540 87489.63 851540 87489.63 X Variable 1 423.347031 931.5498 0.454455 0.673071 2163.05 3009.744 2163.05 3009.744 X Variable 2 761307.277 355237.6 2.143093 0.098744 224991 1747605 224991 1747605 X Variable 3 456868.091 255277.6 1.78969 0.148004 1165632 251896.3 1165632 251896.3 X Variable 4 2.87834273 1.46944 1.958802 0.121722 1.20148 6.958163 1.20148 6.958163 Table value of t 4 degree of freedom at 5% level significance is 2.78 Table value of at (4,4) at 5 % level is 6.39 95

Equation 5: SUMMARY OUTPUT OR X1,X2,X3,X4, X5 Multiple R 0.90815268 R Square 0.8247413 Adjusted R Square 0.53264346 Error 78939.3822 df SS MS Regression 5 8.8E+10 1.76E+10 2.82351 0.21108 Residual 3 1.87E+10 6.23E+09 Total 8 1.07E+11 Error t Stat Pvalue Lower 95% 95% Lower Intercept 512854.157 411867.4 1.24519 0.301461 1823600 797891.7 1823600 797891.7 X Variable 1 357.869966 1069.023 0.334763 0.759843 3044.24 3759.979 3044.24 3759.979 X Variable 2 692086.696 445638.2 1.553024 0.218235 726133 2110306 726133 2110306 X Variable 3 399615.193 329850.5 1.2115 0.312425 1449347 650116.5 1449347 650116.5 X Variable 4 2.71564054 1.722341 1.576715 0.212955 2.76562 8.196898 2.76562 8.196898 X Variable 5 10034.7473 27980.02 0.35864 0.743618 79010.2 99079.67 79010.2 99079.67 Table value of t 5 degree of freedom at 5% level significance is 2.57 Table value of at (5,3) at 5 % level is 9.01 Equation 6: SUMMARY OUTPUT OR X1,X2,X3,X4,X5,X6 Multiple R 0.92205623 R Square 0.85018769 Adjusted R Square 0.40075075 Error 89386.7838 df SS MS Regression 6 9.07E+10 1.51E+10 1.891673 0.385468 Residual 2 1.6E+10 7.99E+09 Total 8 1.07E+11 Error t Stat Pvalue Lower 95% 95% Lower Intercept 440868.751 482453.4 0.91381 0.457282 2516698 1634961 2516698 1634961 X Variable 1 319.317215 1212.311 0.263395 0.8169 4896.84 5535.472 4896.84 5535.472 X Variable 2 934227.352 653630.5 1.42929 0.289154 1878118 3746572 1878118 3746572 X Variable 3 557098.842 460991.2 1.20848 0.350357 2540584 1426386 2540584 1426386 X Variable 4 2.10776621 2.211639 0.953034 0.441156 7.40815 11.62368 7.40815 11.62368 X Variable 5 1452.71476 34937.44 0.04158 0.970611 148871 151776.4 148871 151776.4 X Variable 6 5104.64693 8758.13 0.58285 0.618958 42787.8 32578.54 42787.8 32578.54 Table value of t 6 degree of freedom at 5% level significance is 2.37 Table value of at (6,2) at 5 % level is 19.33 96

Equation 7: SUMMARY OUTPUT OR X1,X2,X3,X4,X5,X6,X7 Multiple R 0.98216 R Square 0.964638 Adjusted R Square 0.717101 Error 61416.54 df SS MS Regression 7 1.03E+11 1.47E+10 3.896948 0.37198 Residual 1 3.77E+09 3.77E+09 Total 8 1.07E+11 Error t Stat Pvalue Lower 95% 95% Lower Intercept 690420 359340.9 1.92135 0.305505 5256279 3875439 5256279 3875439 X Variable 1 550.0618 842.7809 0.652675 0.631873 10158.5 11258.61 10158.5 11258.61 X Variable 2 512040.6 506719.4 1.010501 0.496675 5926440 6950521 5926440 6950521 X Variable 3 337816 339384.9 0.99538 0.501475 4650110 3974478 4650110 3974478 X Variable 4 3.047978 1.60695 1.896748 0.308878 17.3703 23.46621 17.3703 23.46621 X Variable 5 26707.54 27808.47 0.96041 0.512855 326633 380047.7 326633 380047.7 X Variable 6 803.339 6475.182 0.12406 0.92142 83078.3 81471.65 83078.3 81471.65 X Variable 7 21615.94 12015.37 1.799024 0.322976 131054 174285.7 131054 174285.7 Table value of t 7 degree of freedom at 5% level significance is 2.14 Table value of at (7,1) at 5 % level is 236.8 97

Table 3.12: SUMMARY O VARIOUS REGRESSION EQUATIONS PUBLIC SECTOR MUTUAL UNDS(OTHER THAN UTI) No. of Multiple R Adjusted Value Considered EQUATION Independent R SQUARE R 2 YES/NO NO. variables Eq1 1 0.45 0.20 0.09 1.81 No Eq2 2 0.72 0.52 0.37 3.35 Yes Eq3 3 0.80 0.64 0.42 2.98 Yes Eq4 4 0.90 0.81 0.63 4.47 Yes Eq5 5 0.90 0.82 0.53 2.82 Yes Eq6 6 0.92 0.85 0.40 1.89 Yes Eq7 7 0.98 0.96 0.71 3.89 Yes Eq8* 7 0.97 0.96 0.68 3.4 Yes * or independent variables X2 To X8 see the following table 98

Equation 8: SUMMARY OUTPUT OR X2 TO X8 Multiple R 0.979892 R Square 0.960188 Adjusted R Square 0.681505 Error 65165.98 Table 3.13: Optimum Regression Model: df SS MS Regression 7 1.02E+11 1.46E+10 3.445447 0.393232 Residual 1 4.25E+09 4.25E+09 Total 8 1.07E+11 Error t Stat Pvalue Lower 95% 95% Lower Intercept 758627 426513.8 1.77867 0.326061 6177999 4660745 6177999 4660745 X Variable 2 45851.21 881788.5 0.051998 0.966927 1.1E+07 11250036 1.1E+07 11250036 7374193 7373586 X Variable 3 303.642 580337.7 0.00052 0.999667 7374193 7373586 X Variable 4 2.580876 1.455887 1.772717 0.326973 15.9179 21.07967 15.9179 21.07967 X Variable 5 28538.58 29577.02 0.96489 0.511374 347273 404350.3 347273 404350.3 X Variable 6 1740.066 8958.947 0.194227 0.877872 112094 115574.3 112094 115574.3 X Variable 7 14494.29 17046.53 0.850278 0.551402 202102 231091 202102 231091 X Variable8 5249.305 10166.28 0.516345 0.696563 123926 134424.2 123926 134424.2 Table value of t 7 degree of freedom at 5% level significance is 2.14 Table value of at (7,1) at 5 % level is 236.8 The regression results indicate that there was negative impact of volatility index of BSE Sensex and gross resource mobilized by public sector mutual funds. value is 3.44 at 5 degrees of freedom and r square value is 0.96. All impendent variables have smaller t values than statistical table values. They are insignificant. 99

Table 3.14: CORRELATION COEICIENTS AMONG THE VARIABLES Gross Resource Mobilization X1 X2 X3 X4 X5 X6 X7 X8 Gross Resource Mobilization 1 X1 0.45337 1 X2 0.44265 0.239996 1 X3 0.233783 0.435206 0.956562 1 X4 0.734845 0.54014 0.215294 0.094175 1 X5 0.42077 0.43249 0.21698 0.37153 0.316338 1 X6 0.00368 0.15735 0.137664 0.002831 0.23418 0.11188 1 X7 0.431157 0.078486 0.544133 0.509828 0.01218 0.3883 0.096656 1 X8 0.838828 0.3221 0.283912 0.056602 0.425071 0.341022 0.056053 0.49858 1 Interpretation: The results indicate that there is a negative correlation between the following variables: a. Turnover ratio and Gross resource mobilized b. House holding savings in mutual funds other than UTI and gross resource mobilized. 100

3.5.c. Regression Model of Unit Trust of India Mutual und: Table3.15 provides the basic data for Unit Trust of India mutual funds. Table3.16 indicates regression results of various equation using different combinations of independent variables and table3.17 provides summary of all these equations. Table3.18 is allotted for optimum model and finally correlation among all the variables is given in Table3.19. Year TABLE 3.15: BASIC DATA OR UNIT TRUST O INDIA MUTUAL UNDS Gross BSE 100 resource Index mobilized X3 Turnov er Ratio X1 Volatili ty BSE Sensex X2 II Investme nt (Rs.Crore ) X4 House holding savings Insura nce funds (per cent) X5 House holding savings Mutual funds (other than UTI) (percent) X6 House holding savings in Shares and debenture s (percent) X7 House holding savings In bank deposits (percent) X8 199900 13698 75.2 1.72 2.23 10122 12.1 3.4 7.7 36.3 200001 12413 175 1.72** 2.23** 9934 13.6 1.3 4.1 41 200102 4643 50.2 1.5 1.6 8755 14.2 18 2.7 39.4 200203 7096 54.9 1.01 0.99 2689 16.1 1.3 1.7 40.9 200304 23992 41.9 1.35 1.52 45765 13.7 1.2 0.1 38.3 200405 46656 30.5 1.48 1.73 45881 16 0.4 1.1 37 200506 73137 27 1.03 0.99 41467 14.2 3.6 4.9 47.1 200607 142280 27 1.75 1.86 30840 15 4.8 6.3 55.7 200708 337498 30.7 1.93 2.20 66179 15.5* 5.0* 6.1* 52* * provisional values. **: Assumed as same trend as data is not available in SEBI handbook. Source: Hand book on Indian stock markets, SEBI, 2009. 101

TABLE 3.16 : REGRESSION RESULTS USING VARIOUS EQUATIONS OR UNIT TRUST O INDIA MUTUAL UNDS Equation 1: SUMMARY OUTPUT OR X1 Multiple R 0.372869 R Square 0.139032 Adjusted R Square 0.016036z Error 107556.8 df SS MS Regression 1 1.31E+10 1.31E+10 1.13038 0.32299 Residual 7 8.1E+10 1.16E+10 Total 8 9.41E+10 Error t Stat Pvalue Lower 95% 95% Lower Intercept 122388.1 58314.67 2.098754 0.074007 15504.1 260280.4 15504.1 260280.4 X Variable 1 858.861 807.8126 1.06319 0.32299 2769.03 1051.312 2769.03 1051.312 Table value of t 1 degree of freedom at 5% level significance is 12.71 Table value of at (1,7) at 5 % level is 5.59 Equation 2: SUMMARY OUTPUT OR X1,X2 Multiple R 0.729157 R Square 0.53167 Adjusted R Square 0.37556 Error 85682.82 df SS MS Regression 2 5E+10 2.5E+10 3.405742 0.10272 Residual 6 4.4E+10 7.34E+09 Total 8 9.41E+10 Error t Stat Pvalue Lower 95% 95% Lower Intercept 183361 144020.9 1.27315 0.250064 535767 169045.5 535767 169045.5 X Variable 1 1215.68 662.9003 1.83388 0.116361 2837.74 406.3787 2837.74 406.3787 X Variable 2 217537.1 96992.28 2.242829 0.066089 19794.4 454868.7 19794.4 454868.7 Table value of t 2 degree of freedom at 5% level significance is 4.30 Table value of at (2,6) at 5 % level is 5.1 102

Equation 3: SUMMARY OUTPUT OR X1, X2,X3 Multiple R 0.774695 R Square 0.600152 Adjusted R Square 0.360243 Error 86727.33 df SS MS Regression 3 5.64E+10 1.88E+10 2.501583 0.173776 Residual 5 3.76E+10 7.52E+09 Total 8 9.41E+10 Error t Stat Pvalue Lower 95% 95% Lower Intercept 320226 207665.9 1.54202 0.183707 854048 213596.4 854048 213596.4 X Variable 1 559.026 976.5981 0.57242 0.591813 3069.45 1951.399 3069.45 1951.399 X Variable 2 615667.7 441289.2 1.395157 0.221771 518702 1750038 518702 1750038 X Variable 3 291561 315068.6 0.92539 0.39723 1101471 518348.3 1101471 518348.3 Table value of t 3 degree of freedom at 5% level significance is 3.18 Table value of at (3,5) at 5 % level is 5.41 Equation 4: SUMMARY OUTPUT OR X1,X2,X3,X4 Multiple R 0.889651 R Square 0.791479 Adjusted R Square 0.582959 Error 70022.54 df SS MS Regression 4 7.44E+10 1.86E+10 3.795692 0.112309 Residual 4 1.96E+10 4.9E+09 Total 8 9.41E+10 Error t Stat Pvalue Lower 95% 95% Lower Intercept 369303 169612.5 2.17733 0.095027 840223 101616.6 840223 101616.6 X Variable 1 401.2818 934.3371 0.429483 0.689695 2192.85 2995.418 2192.85 2995.418 X Variable 2 620609.8 356300.6 1.741815 0.156506 368639 1609859 368639 1609859 X Variable 3 347311 256041.5 1.35647 0.246461 1058196 363573.8 1058196 363573.8 X Variable 4 2.82354 1.473837 1.915775 0.127892 1.26849 6.915567 1.26849 6.915567 Table value of t 4 degree of freedom at 5% level significance is 2.78 Table value of at (4,4) at 5 % level is 6.39 103

Equation 5: SUMMARY OUTPUT OR X1,X2,X3,X4,X5 Multiple R 0.89561 R Square 0.802117 Adjusted R Square 0.472311 Error 78765.73 df SS MS Regression 5 7.54E+10 1.51E+10 2.432091 0.247581 Residual 3 1.86E+10 6.2E+09 Total 8 9.41E+10 Error t Stat Pvalue Lower 95% 95% Lower Intercept 515474 410961.4 1.25431 0.298562 1823336 792388.9 1823336 792388.9 X Variable 1 328.1266 1066.672 0.307617 0.778493 3066.5 3722.752 3066.5 3722.752 X Variable 2 543272 444657.9 1.221775 0.30904 871828 1958372 871828 1958372 X Variable 3 283345 329125 0.8609 0.452601 1330767 764077.9 1330767 764077.9 X Variable 4 2.641758 1.718552 1.5372 0.221842 2.82744 8.110958 2.82744 8.110958 X Variable 5 11211.47 27918.47 0.401579 0.714889 77637.6 100060.5 77637.6 100060.5 Table value of t 5 degree of freedom at 5% level significance is 2.57 Table value of at (5,3) at 5 % level is 9.01 104

Equation 6: SUMMARY OUTPUT X1,X2,X3,X4,X5, X6 Multiple R 0.900198 R Square 0.810357 Adjusted R Square 0.241428 Error 94438.03 df SS MS Regression 6 7.62E+10 1.27E+10 1.424355 0.467856 Residual 2 1.78E+10 8.92E+09 Total 8 9.41E+10 Error t Stat Pvalue Lower 95% 95% Lower Intercept 477007 509716.8 0.93583 0.448153 2670142 1716127 2670142 1716127 X Variable 1 307.5255 1280.819 0.240101 0.832618 5203.39 5818.445 5203.39 5818.445 X Variable 2 672662.5 690567.2 0.974072 0.432759 2298608 3643933 2298608 3643933 X Variable 3 367498 487041.8 0.75455 0.529264 2463069 1728074 2463069 1728074 X Variable 4 2.316934 2.336619 0.991576 0.425906 7.73672 12.37059 7.73672 12.37059 X Variable 5 6625.571 36911.76 0.179498 0.874086 152193 165444 152193 165444 X Variable 6 2727.72 9253.052 0.29479 0.795937 42540.4 37084.95 42540.4 37084.95 Table value of t 6 degree of freedom at 5% level significance is 2.37 Table value of at (6,2) at 5 % level is 19.33 105

Equation 7: SUMMARY OUTPUT OR X1 TO X7 Multiple R 0.961179 R Square 0.923865 Adjusted R Square 0.39092 Error 84622.47 df SS MS Regression 7 8.69E+10 1.24E+10 1.733508 0.527658 Residual 1 7.16E+09 7.16E+09 Total 8 9.41E+10 Error t Stat Pvalue Lower 95% 95% Lower Intercept 710377 495116 1.43477 0.387507 7001423 5580669 7001423 X Variable 1 523.3079 1161.222 0.450653 0.730457 14231.4 15278.03 14231.4 X Variable 2 277851.7 698180.8 0.397965 0.75888 8593377 9149080 8593377 X Variable 4 3.19618 2 24. 5 30242.79 38315.77 0.7 162434 467619.8 0.34736 0.787162 6104107 5779239 6104107 5779239 6 1294.675 8921.798 0.1 7 20214.29 16555.32 1.2 190141 230569.5 X Variable 4 106

Table 3.17: SUMMARY O VARIOUS REGRESSION EQUATIONS UNIT TRUST O INDIA No. of Multiple R Adjusted Value Considered EQUATION Independent R SQUARE R 2 YES/NO NO. variables Eq1 1 0.37 0.13 0.01 1.13 No Eq2 2 0.72 0.53 0.37 3.40 Yes Eq3 3 0.77 0.60 0.36 2.50 Yes Eq4 4 0.88 0.79 0.58 3.37 Yes Eq5 5 0.89 0.80 0.42 2.43 Yes Eq6 6 0.90 0.81 0.24 1.42 Yes EQ7 7 0.96 0.92 0.39 1.42 yes Eq8* 7 0.95 0.91 0.34 1.59 Yes * or independent variable x2 to x8 see the following table 107

Table 3.18: OPTIMUM MODEL Equation 8: SUMMARY OUTPUT OR X2 TO X8 Multiple R 0.957896 R Square 0.917564 Adjusted R Square 0.340514 Error 88054.44 df SS MS Regression 7 8.63E+10 1.23E+10 1.590094 0.546203 Residual 1 7.75E+09 7.75E+09 Total 8 9.41E+10 Error t Stat Pvalue Lower 95% 95% Lower Intercept 767140 576319.6 1.3311 0.410178 8089975 6555695 8089975 6555695 X Variable 2 136459 1191502 0.11453 0.927406 1.5E+07 15003008 1.5E+07 15003008 X Variable 3 139160.1 784171.5 0.177461 0.888189 9824684 10103004 9824684 10103004 X Variable 4 2.744769 1.967243 1.395236 0.39589 22.2514 27.74096 22.2514 27.74096 X Variable 5 31891.05 39965.45 0.797965 0.571237 475918 539700.3 475918 539700.3 X Variable 6 3478.053 12105.63 0.287309 0.821891 150339 157294.6 150339 157294.6 X Variable 7 13907.15 23033.84 0.60377 0.654196 278766 306579.8 278766 306579.8 X Variable 8 4579.473 13737.02 0.333367 0.795148 169966 179124.8 169966 179124.8 Table value of t 7 degree of freedom at 5% level significance is 2.14 Table value of at (7,1) at 5 % level is 236.8 Optimum Model: value is 1.59 at 5 degrees of freedom and r square value is 0.91. In this model independent variable x1 is removed. Only one independent variable i.e. Volatility index of BSE sensex is having negative impact on gross resource mobilization by UTI Mutual unds. 108

Table 3.19: CORRELATION COEICIENTS AMONG THE VARIABLES: Gross Resource Mobilization X1 X2 X3 X4 X5 X6 X7 X8 Gross Resource Mobilization 1 X1 0.37287 1 X2 0.518808 0.239996 1 X3 0.335326 0.435206 0.956562 1 X4 0.732885 0.54014 0.215294 0.094175 1 X5 0.365209 0.43249 0.21698 0.37153 0.316338 1 X6 0.00629 0.15735 0.137664 0.002831 0.23418 0.11188 1 X7 0.440324 0.078486 0.544133 0.509828 0.01218 0.3883 0.096656 1 X8 0.758018 0.3221 0.283912 0.056602 0.425071 0.341022 0.056053 0.49858 1 Interpretation: The results indicate that there is a negative correlation between the following variables is observed: a. turnover ratio and gross resource mobilized by Unit Trust of India. b. Household savings in mutual funds other than UTI and Gross resource mobilized. by Unit Trust of India A positive relationship between II Investment to gross resources mobilized by UTIM indicates that foreign institutional investors are showing more interest in Unit Trust of India mutual fund schemes. 109

Regression Equations ( after considering independent variables x2 to x8): Private Sector: Y = 8032541 495823 X2 + 782682.8 X3 + 31.53 X4+ 349789.8X5 + 29970X6+ 130372 X7 +40050 X8 Public Sector(Other than UTI): Y = 758627+ 45881 X2 303.64 X3 + 2.58 X4+ 28538.6 X5 + 1740 X6+ 14494 X7 + 5249 X8 Unit Trust of India Y = 767140 136459 X2 + 139160 X3 + 2.74 X4+ 31891 X5 + 3478 X6+ 13907 x7 + 4579 X8 7.0. Impact of Independent Variables: X2: Volatility Index of BSE Sensex: The coefficient values are indicating that the volatility in the BSE Sensex will positively influence resource mobilization by private sector and Unit Trust of India. It will highly influence private sector than UTI. However it will have a negative impact on Public sector mutual funds (other than UTI). X3: Volatility Index Value of BSE 100: The coefficient values are indicating the quite opposite impact as BSE sensex, that the volatility in the BSE 100 Index will negatively influence resource mobilization by private sector and Unit Trust of India. It will highly reduce resource mobilization in private sector than UTI. However it will have a positive impact on Public sector mutual funds (other than UTI). It can be observed that the calculated value of t is 0.17, which is small and insignificant. 110

X4: II Investment (Rs. Crores): The coefficient values indicate that II will have direct and positive impact on the gross resource mobilization in the private sector as well as public sector including UTI. However, II investments are mostly influencing resource mobilization in Private sector. X5: House hold savings percent of insurance funds: The coefficient values indicate that household savings in insurance funds also leads to increase in the gross resource mobilization in the private sector as well as public sector including UTI. However, first rank can be given to private sector, second rank to UTI and last rank to public sector( other than UTI). X6: House hold savings per cent in public sector other than UTI mutual funds: The coefficient values indicate that household savings in public sector(other than UTI) leads to increase in the gross resource mobilization in the private sector as well as public sector including UTI. However, first rank can be given to private sector, second rank to UTI and last rank to public sector( other than UTI). It can be observed that the calculated value of t is 0.22, which is small and insignificant. X7: Household savings in shares and debentures: The coefficient values indicate that household savings in shares and debentures are also having linear relation to the dependent variable i.e. the gross resource mobilization in the private sector as well as public sector including UTI. However, first rank can be given to private sector, second rank to UTI and last rank to public sector( other than UTI). X8: Household savings in bank deposits: The same trend is observed in case of household savings in bank deposits and gross resource mobilization. Thus it can be stated that changes in household savings in bank deposits are positively influencing 111

the gross resource mobilization. It can be observed that calculated value of t is o.33, which is one of the smallest values and insignificant. 3.6. indings and Conclusions: INDINGS: India s share of total net resource mobilized in the word, will be improving to 0.40 per cent by the year 2020, from 0.11 per cent in 2000. America group share will be declined to 37.2 per cent by 2020 as against its share which was 62.5 per cent in 2000. Even European countries share is also expected to decline by 9 per cent and Asia Pacific region share is expected to decline by 3 per cent by the year 2020. The 94 per cent of market share of mutual funds is relating to openend schemes in 2001, and it is increased to 97 per cent in the year 200708. It was observed that the liquid and money market schemes have gone significantly from 40 per cent in the year 200001 to 77 per cent by the year 200708. In case of Debt (other than assured return) is declined from 24 per cent in year 2000 01 to 20 per cent by the year 20078. Investors have shown least preference to assured return schemes in the debt funds. Gold exchange traded fund and other exchange traded funds are just commenced in the year 200708. GROSS RESOURCE MOBILIZATION: Private sector is gaining more market share and attracting huge response from investors, as the results showing that its market share is only 2 per cent in 199394 and raised to 85 per cent by the end of 200708. Public sector (other than UTI): This sector has shown consistency in performance during 19932008 on average market share of 8 per cent. But highest contribution in the market share in 199394 is 57 per cent. 112