SBI Capital Markets Ltd is planning to increase its retail equity broking business by setting up 50 new offices. It may even spin off the business as a separate subsidiary in the current year. |
"The board has favourably considered the idea of a separate subsidiary. It will be a subsidiary of SBI Caps and may be set up in this year itself. By end-2006 we will have 50 offices," said senior SBI Caps officials at the sidelines of a press conference held by the company to announce its annual results. |
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Currently, SBI Caps with nine offices, runs the equity broking business as a strategic business unit and its retail base is minuscule. "We aim to take the retail revenues to Rs 25 crore by March 2006," said Indrajit Gupta, managing director & CEO. |
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SBI Caps posted a 40 per cent jump in net profit to Rs 88 crore for the year ended March 2005, up from Rs 63 crore in the previous year. The company's total income grew by 24 per cent to Rs 174 crore (Rs 138 crore). It paid a dividend of 75 per cent to its stakeholders, State Bank of India and the Asian Development Bank. |
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The company has found a higher success rate in cross-border project advisory services compared with the rate in India, said Gupta. Some of SBI Caps's big-ticket projects in hand overseas include a $200 million water and power project in Oman, a $50 million water project in Bangladesh and a few projects in Sri Lanka. |
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As part of its overseas expansion, SBI Caps has entered into strategic alliances with Merchant Bank of Sri Lanka, the merchant banking arm of Bank of Ceylon in Sri Lanka and with Industrial Development Leasing Corporation in Bangladesh. "These alliances will be scaled up to joint ventures in 12-18 months," Gupta said. |
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"We are also exploring the Middle East, African, South East Asian and US markets for expansion. Through the international offices we want to establish links with FIIs. Currently, we have no institutional connection with them which needs to be built up," he added. |
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