Business Daily from THE HINDU group of publications
Tuesday, Oct 30, 2007
ePaper | Mobile/PDA Version
Business Daily from THE HINDU group of publications Tuesday, Oct 30, 2007 ePaper | Mobile/PDA Version |
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Markets
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Investment Banking Web Extras - Financial Services Priya Nair Mumbai, Oct. 29 Merchant bank A K Capital Services is planning to offer portfolio management services (PMS) and has applied to SEBI for a licence. The firm, which plans to offer wealth management primarily through debt, is also considering setting up a separate subsidiary for PMS service, within the next two to three months, said Mr A.K. Mittal, Managing Director. “There is huge scope for investment in debt instruments because they are not as risky as equity instruments and yet offer higher returns than bank deposits. And we have expertise in fixed income instruments, which will work to our benefit,” he said. A K Capital also offers equity trading for financial institutions and high networth individuals from April 2007, through its 100 per cent owned subsidiary A K Stockmarket Pvt Ltd. It plans to start retail operations within the next three years, Mr Mittal added. The aim is to grow the balance sheet size from the Rs 100 crore this year to Rs 125 crore in 2008 and to Rs 500 crore in the next three years. “Apart from our subsidiaries, we will also require funds for growth. We are targeting 60-75 per cent growth for the next three years as our base is small. After that we would grow by about 30 per cent.” Currently present in 10 locations across the country, the firm is planning to open about five more branches before March 2008.
It recently raised Rs 36 crore by selling 8 lakh shares and by issuing another 8 lakh shares as compulsory convertible preferential shares to FirstRand (Ireland) PLC, which is the private equity arm of FirstRand Group, one of the largest financial service groups of South Africa. This has brought down the promoter holding to 57 per cent. The plan is to bring it down further to 51 per cent, Mr Mittal said. A K Capital has been one of the top issuers of private corporate bonds for the last four consecutive years, according to Prime Database. Its share in the corporate bond market was Rs 14,000 crore in 2004-05, Rs 24,550 crore in 2005-06 and Rs 17,483 crore in 2006-07. For the quarter ended September 30, A K Capital had a net profit of Rs 5.64 crore against Rs 3.41 crore in the same quarter last year, an increase of 65 per cent. More Stories on : Investment Banking | Financial Services
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