The Hindu Business Line : SSKI plans to enter PMS in big way

STOCK broking firm SSKI has decided to enter the PMS (portfolio management services) business in a big way. It has proposed to work out a two-pronged strategy with a view to tap high networth clients.

The first will be flagged off as a special group, appropriately named `Elite Guild', while the second will come up in a more modest way — a regular PMS that would require an investment of Rs 25 lakh or more. Elite Guild will be backed by a dedicated software.

For SSKI, an entry into the PMS business would be a natural move, feels Mr Rahul Rege, Head of Equity Sales. The firm, which has been into investments for several decades, had applied for a PMS licence about three years ago.

However, it decided to take a concrete step only recently. Since then, it has gone to SEBI for approval of a number of schemes.

Elite Guild, which will require investors take a lot of decisions, will not be a PMS in the strict and usual sense of the term, it is explained. It will nevertheless provide considerable value-addition to clients' portfolios. The idea here is to build on the relationships that already exist between SSKI and its clients.

"The concept of PMS is just emerging in India and displays all the signs of a major business opportunity," Mr Rege said, adding that SSKI will seek to maximize performance by following a research-backed strategy.

It may be mentioned here that the PMS domain is already getting crowded with more and more players entering it with their own services. A number of broking houses, in addition to select asset management companies, are in the business. Some like IL&FS Investsmart have even positioned themselves for medium networth investors.

According to Mr Dinshaw Irani, Head - PMS, the regular service will be based on several alternatives which investors can choose, depending on their risk profiles and specific requirements.

There will be, for instance, an option for those who have a relatively high appetite for risk and one for those who are risk-averse in nature. There will also be room for a capital guaranteed option, which will be ensured through careful exposure to fixed-income securities.

Elsewhere, the firm is expanding its role in investment banking. It has already found mandates in the IPO market; its next mandate in fact will be courtesy ICICI Bank, which is currently preparing ground for an issue.

SSKI is also turning to commodity trading in a significant manner.

A subsidiary outfit, Sharekhan Commodities, has been set up through clients can trade on the two major exchanges, MCX and NCDEX.