The Hindu Business Line : Apollo Sindhoori's gambit to expand volumes

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Chennai Feb. 8 Want to do some business sitting at home? Try your hand at stock broking, says Apollo Sindhoori Capital Investments Ltd, a corporate stock and commodity broking house.

All it takes is a computer, telephone and a V-Sat to set up a broking office, so why not have several thousands of them across the country, asks Mr P.B. Subramaniyan, Executive Director.

Apollo Sindhoori recently advertised calling for such home office franchisees and according to Mr Subramaniyan, the response has been overwhelming.

Apollo Sindhoori will start with a pilot of about fifty, but Mr Subramaniyan's intention is to have "probably 10,000 home dealers across the country" in a few years.

why this model?

Apollo Sindhoori, part of the Apollo Hospitals group, has 143 branches and 349 franchisees (sub-brokers). In the third quarter of the current year, it clocked turnover of Rs 17 crore against Rs 13 crore in the same period last year. But net profit doubled to Rs 3 crore.

Mr Subramaniyan told Business Line that the company's performance could have been better but for the limitations of physical infrastructure.

The dealers are so busy that about 30 per cent of the calls made to Apollo's offices end up not being attended to.

According to him, Apollo would pay a basic salary and even "move" some of its clients to the new home-based dealers, to provide them with an anchor load at the start-up stage.

What, then, is the dealers' contribution to the business? "Commitment," says Mr Subramaniyan.

The dealer would have to be present at the home office right through the trading hours, take calls and effect transactions. The dealer would get 60 per cent share of the brokerage for these efforts.

The other 40 per cent will be lucrative enough for Apollo, because the dealers would bring in volumes.

"What do we spend? Just about Rs 1.25 lakh. We can recover it in a matter of 3-4 months."

This model, Mr Subramaniyan says, would provide Apollo with a low-cost complement to the company's existing branch network. Because of the salary-cum-brokerage sharing model, the dealers would feel impelled to get more clients. This way, market development would happen.

Moreover, as trading on commodity trading exchanges goes until late in the night a home office would be better because some member of the family could chip in to share the duties.

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