Steel City Securities puts off expansion plans

In view of the distressed capital market scenario in the country, Vizag-based Steel City Securities Limited (SCSL) has decided to postpone its expansion plans by a few months.

SCSL has membership in BSE, NSE as well as National Commodity & Derivatives Exchange Limited.

Due to bullish trends in the share market, SCSL had expected Rs 60,000-Rs 70,000 crore trading turnover during this fiscal at the beginning of the year.

But owing to a steep fall in Sensex, SCSL, which has 270 branches across the country and more than one lakh trading customers, has decided to go slow on its expansion plans. Of the proposed 80 new branches, it has opened 20 over the last two months.

"After observing the capital market for the last few weeks, we have now decided to go slow on our network expansion plans," G Raja Gopal Reddy, executive director, SCSL, told Business Standard.

In April, SCSL's daily trading turnover touched Rs 350-400 crore. It has now slipped to Rs 80-100 crore a day and is expected to drop further.

"Due to fall in trading turnover, our commission earnings too have dropped considerably. If the situation continues for some more months, it will be difficult to meet overheads and even monthly salary bill," he said.

SCSL is awaiting Securities and Exchange Board of India's (Sebi) nod to go for a public issue to raise about Rs 60 crore.

"We have submitted all the documents to Sebi. We will, however, wait for the market to recover," Reddy said.