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R.Y. Narayanan

Coimbatore , July 18

EVERYONE knows that Namakkal in Tamil Nadu has carved a niche for itself in the industrial sector — be it road transport or poultry development.

But this small town in the western part of the State has earned a name for itself for the least expected reason — it accounts for the largest business volume of a share broking company, even beating its other branches in cities such as Bangalore and Chennai that at one time had their own bustling stock exchanges and where capital market activity is believed to be well entrenched.

What is more significant is that investors in Namakkal are not speculative day traders but those who make value investment and are content to exit from a stock if they make 10-15 per cent profit on their investment.

Mr V.A. George, President, India Cements Capital & Finance Ltd (ICCFL), Chennai, told Business Line his company's decision to open a branch at Namakkal was greeted with pessimism since people there were known for their business acumen rather than for their stock picking skill. But the company went ahead with the move. Today, the Namakkal branch accounts for the maximum turnover and profitability in so far as equity related business is concerned.

He said the people coming to invest in Namakkal are not speculators but real investors in their mid 50s.

After handing over the mantle of their businesses to their heirs, they come to ICCFL office to invest in the capital markets. It offered them not only an opportunity to make investment but also helped them to keep themselves engaged when they have retired from active business life.

Mr G. Sridhar, Executive Director, India Cements Investment Services Ltd, said the investors were happy making a 12-15 per cent profit on their investment. They sold their holdings once this investment target was reached and looked for low priced stocks for making fresh investments. He said the common perception that people in rural areas were not investment savvy or not aware of information was `a myth'. He had seen rural people bringing physical share certificates of companies such as Dr.Reddy's or Ranbaxy Labs for conversion into demat and for trading.

He said the Namakkal branch accounted for nearly 30 per cent of the daily volume of business of the company that was in the Rs 5 crore-Rs 10 crore range in cash market segment and an equal amount in F&O.

Mr George said the company will open shortly a branch at Tiruchengode. The company wanted to scale up its operations and number of branches would go up from 12 at present to 20 by September. By the end of next year, it wanted to have 50 branches for its investment services operations and the roadmap was to have around 150 branches in the next three or four years. All of them would be company-owned and it would not take the franchisee route for expanding its reach. It was also looking at having a tie-up with a foreign broking outfit to bring qualitative improvement in its services.

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