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Our Bureau

Kolkata, Sept 10 The Peerless General Finance and Investment Company Ltd (PGFI) will soon launch an asset management company.

At the company’s shareholders here on Wednesday, Mr D. Basu, Chairman of PGFI, said the proposed AMC would be promoted by PGFI itself, and not through any subsidiary as decided earlier. “The Board, following detailed deliberations, has concluded that PGFI, rather than one of its subsidiaries (as decided earlier), should be the promoter of the AMC,” he said. PGFI has applied to the Securities and Exchange Board of India for the revised structure and is waiting for its approval for the same, he added.

Following the Reserve Bank of India’s advice to exit from Residuary Non-Banking Finance Companies (RNBC) business, PGFI decided to migrate into asset management business and accordingly appointed a firm of strategy consultants to identify appropriate alternative businesses and subsequently an AMC was considered a logical strategic choice, he said.

The exercise also validated the company’s decision to take up the Financial Products Distribution (FPD) business in a substantial way, he pointed out. “A few other strategic options, including those relating to certain other financial products and services are still being examined as a part of the exercise and a final blue print on this would emerge soon,” he said.

PGFI forayed into retail distribution of life and general insurance products as a part of its FPD business. The company plans to lay emphasis on growing this business rapidly but prudently, utilising the infrastructural facilities across the country and also through its agent network, he said. It has also launched distribution of mutual fund products and a co-branded credit card in association with ICICI Bank.

Net profit as on March 31, 2008 was lower at Rs 144 crore, against Rs 184 crore during the corresponding period last year, due to higher tax outgo following full adjustment of the loss carried forward from the past, said Mr Basu.

The net worth of the company was in excess of Rs 800 crore and it plans to take it up to Rs 1,000 crore within the next two-to-three years. The capital adequacy ratio was 93.51 per cent much higher than the statutory minimum of 12 per cent, the Chairman said.

The Board of Directors of the company have announced a final dividend of 35 per cent, which together with the interim dividend of 25 per cent already paid, would amount to a payout of 60 per cent to the shareholders.

More Stories on : NBFCs | Asset Management Companies

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