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Prosharpe Wealth Management*

CASE STUDY, FINANCIAL MANAGEMENT
ET Cases, 17 Pages

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Prosharpe Wealth Management

 

On November 8th 2010, Ramanjaneyulu Vaidyula (Vaidyula), sitting in his air conditioned office in Hyderabad, India, felt a trickle of sweat on his forehead as he leaned forward in his chair to have a closer look at his computer terminal. He was holding the mouse tight in one hand while gripping the armrest of his chair with the other. He loosened his tie, wiped the sweat, drank a sip of water and slumped back in the chair. He had just lost over 1.5 million in intra-day stock market transactions.

Vaidyula, a Non-Resident Indian (NRI) had spent around 15 years in the US, where he had completed his education and gained work experience before moving back to India in 2004. He aspired to combine his passion for starting his own business and fascination towards financial markets. While he was at his first job in the US he had done his first investment in the commodities market in 1994. The markets were performing well which helped in nurturing his interest in stock markets. To enrich his knowledge of investments Vaidyula enrolled for Masters in Business Administration at Carnegie Mellon where he took various courses in Investments. The markets were performing well. He developed further interest in stock markets and enrolled for Masters in Business Administration at Carnegie Mellon where he took various courses in Investments to enrich his knowledge of investments. He wanted to combine his passion for starting his own business and fascination towards financial markets.

Vaidyula, after moving back to India in 2004, took up a job with Wipro Limited, but the aspiration to start his own business made him restless. During the same period, the Indian economy was experiencing healthy growth rates. In next couple of years, Vaidyula decided to quit his job and capitalize on his experience of investing in the US markets. After long deliberations, Vaidyula started his own investment advisory firm named ‘ProSharpe Wealth Management’ in 2008.....................

Teaching Note Preview

Prosharpe Wealth Management

 

Synopsis

The case study brings out importance of understanding customers for financial intermediaries in Indian wealth management industry. First decade of 2000s saw tremendous economic growth and rise of middle class in India which boosted savings and investments by individuals. ProSharpe offered a product which did not exist earlier in the market – financial advisory services. Earlier the advisory part of financial products was free of cost for investors. There were not professional service providers that could customize portfolio management and monitoring services according to risk apatite of an individual investor. While the brief market research showed positive results for the product, actual market launch experienced great difficulties customer acquisition being the major challenge. Customers liked the idea of customized portfolio management services, but they were not ready to pay it. ProSharpe suffered from lack of through market research before launching its products. Ramanjaneyulu Vaidyula (Anji), the promoter, tried his level bet for over 2 years to revive the business, but ProSharpe had to shut-down owing to lack of customers and financial loss.

Expected Learning Outcomes

  • • Understand the nature and dynamics in wealth management market in India
  • • Understand the process of setting up a business in financial services/intermediary space
  • • Emphasize the importance of understanding customers in Indian wealth management Industry

 

Case Positioning and Setting

This case study is fundamentally designed for a Bachelor or Masters course in Finance Management. However, this case study can also be used for teaching the importance of Financial Services and Entrepreneurship.

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Product code: FIN-1-0007, FIN-1-0007A

Abstract


Does passion always payoff? What if the passion becomes a new found career pursuit? Ramanjaneyulu Vaidyula's (Vaidyula) case highlights the slip between the cup and lip, in converting one's passion into a profitable career pursuit. On November 8th 2010, Vaidyula, sitting in his air conditioned office in Hyderabad, India, felt a trickle of sweat on his forehead as he leaned forward in his chair to have a closer look at his computer terminal. He loosened his tie, wiped his forehead, took a sip of water and slumped back in his chair. He had just lost over ₹1.5 million in intra-day stock market transactions.
Vaidyula, a Non-Resident Indian (NRI) had spent around 15 years in the US, where he had completed his education and gained work experience before moving back to India. He aspired to combine his passion for setting up business with his fascination for financial markets. After returning to India, Vaidyula decided to capitalize on his experience of investing and set up his own investment advisory firm 'ProSharpe Wealth Management'* in 2008. Vaidyula worked extremely hard to steer his business through many ups and downs. While the business did not take off as expected, he always believed that break through was close. He had borne costs in the past, but this was a grave situation as it involved ₹1.5 million of clients' savings. The loss of this magnitude would pull back his business by a few years.
He was not sure what lay ahead. Will he have to rethink his business venture and take a tough call? Was it the end of his dream? Was it the moment of closure? What would it take Vaidyula to redeem the fledgling wealth management firm that he passionately built?



Pedagogical Objectives

  • To understand the nature and dynamics of wealth management market in India
  • To understand the process of setting up a business in financial services/intermediary space
  • To emphasize the importance of understanding customers in Indian wealth management industry

Case Positioning and Setting

This case study is fundamentally designed for Graduate/Postgraduate programs in Finance Management. However, this case can also be used for teaching importance of Financial Services and Entrepreneurship.



* Award Winning Case, GSMC 2014, IIM Raipur



This Case Pack Includes:
 - Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)

* GSMC 2014, IIM Raipur
$4.22
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