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M. Ramesh

Chennai, Jan. 16 Close on the heels of securing Rs 36 crore from Mauritius-based private equity fund Silverman Ltd, Apollo Sindhoori Capital Investments Ltd intends to raise another Rs 100 crore, again through the PE route.

After the formalities, Silverman will own 10 per cent of the financial services company, which offers mainly stock and commodity broking and depository participant services, paying Rs 550 for each share.

The price of the Apollo Sindhoori share rose on Monday, its shares closed on the Bombay Stock Exchange at Rs 823, higher by Rs 31 over the previous close.

At this level of pricing, the company sees scope for raising further equity funding, the company’s Wholetime Director, Mr P. B. Subramaniyam, told Business Line on Monday.

Mr Subramaniyam said that the fresh equity raised would be leveraged to form a corpus of around Rs 500 crore, which would be used mainly for a new line of business — lending to customers for purchase of shares through the primary and secondary markets. For this purpose, a wholly-owned subsidiary would be floated, he said.

The new, ‘fund-based’ business is one of the three prongs of the company’s strategy for growth. Within a month, Apollo Sindhoori intends to start offering portfolio management services (PMS). Mr Subramaniyam stressed that this offering would be different from other PMS in the market — it would target the pension earners and give the secured returns only out of arbitrage operations.

He noted that any point in time, there is money to be made out of the arbitrage between cash and futures markets. Because the cash and futures transactions would be done simultaneously, locking in profits, the investors’ money is safe.

“We can comfortably give 12 per cent returns to our investors,” Mr Subramaniyam said. To avail himself of Apollo Sindhoori’s PM services, an investor would need to put at least Rs 10 lakh under the company’s management. The third line of business is proprietary trading, for which again the equity funding raised will come in handy.

Apollo Sindhoori’s daily turnover (of stocks traded through it) has reached a level of over Rs 800 crore, up from Rs 500 crore a year ago. Today, the company has 1.4 lakh clients.

In the third quarter of the current year, the company’s net profit rose to Rs 9.5 crore, against Rs 6.2 crore in the corresponding quarter of last year, mainly on account of higher brokerage income.

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