The Hindu Business Line : Peninsular Capital to foray into `margin funding'

PENINSULAR Capital Market plans to enter `margin funding' in a big way, for which it needs money. Therefore, the Kochi-based company will first raise Rs 10 crore by way of private placement of shares. Later, perhaps next year, it will come out with an IPO. The Chairman of the company, Mr T.S. Anantharaman, expects to raise Rs 50 crore through the IPO.

Today, those who buy shares need to pay only about 25 per cent of the value of their purchases immediately. The rest of the money will be loaned by the brokers. This is called `margin funding' and, according to Mr Anantharaman, it usually carries an interest rate of around 13 per cent.

Peninsular, which made a net profit of around Rs 3 crore last year on a topline of Rs 14 crore, is a broking house, which is active in equity and commodities market. At present, the company has 230 centres in the country, and proposes to raise the number to 500 by March 2007. It has a client base of 40,000, who trade about Rs 200-crore worth of stocks each day. It intends to raise its client base to one lakh by March 2007. It has also just launched `portfolio management services' and expects to have Rs 100 crore of assets under management by the end of 2006-07. Further, it also plans to start training institutes for trading in stocks and commodities and coaching for SEBI-held examinations.

The fund raising is to support all these endeavours.

In addition to these, Mr Anantharaman intends to get Peninsular more active into commodities markets. For this, it intends to focus on Tamil Nadu.

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