Steel City Securities eyes Rs 35,000cr trading turnover

Plans to open 100 more branches

Steel City Securities Limited is aiming at achieving a growth of about 60 per cent in trading turnover this fiscal.

The company achieved a trading turnover of Rs 22,218 crore in the fiscal ended March 31, 2005 as compared to Rs 19,462 crore in the previous year, reflecting a modest growth of about 14 per cent.

Its income increased to Rs 19.5 crore in 2004-05, as compared to Rs 12.3 crore in the previous year, while its net profits was marginally up to Rs 2.6 crore in 2004-05 as compared to Rs 2.1 crore in 2003-04.

Speaking to Business Standard, G Raja Gopal Reddy, executive director of Steel City Securities Limited, said, "In the current fiscal, we have lined up massive expansion plans including going in for a public issue and opening new branch offices in a few northern states. Owing to these reasons, we expect to achieve a trading turnover of Rs 35,000 crore this fiscal."

Steel City Securities has trading membership in the National Stock Exchange Limited (NSE), Bombay Stock Exchange (BSE) and the National Commodity and Derivatives Exchange Limited. The company currently has 144 branches in Andhra Pradesh, Tamil Nadu, Karnataka and Orissa, 85 per cent of which are in Andhra Pradesh alone.

"We opened about 54 new branches in 2004-05. We plan to open 100 more branches in a few northern states including Uttar Pradesh and Punjab this fiscal," Reddy said.

The company is planning to approach merchant bankers for its forthcoming public issue in a couple of weeks.

"We are expecting the Securities Exchange Board of India (Sebi)'s permission by May-end, and our public issue size will be between Rs 50 crore and Rs 60 crore," he added.

In 2004-05, Steel City Securities issued five bonus shares on each share for its shareholders. The company currently has 130 shareholders, and their share capital base was moved from Rs 1.5 crore to Rs 10.5 crore after issuing the bonus shares.

As on March 31, 2005, the company had reserves to the tune of Rs 14 crore out of which Rs 9 crore was diverted to share capital. The company has reserves of Rs 5 crore at present.

"After the public issue, we plan to increase our margins with exchanges from the existing Rs 21 crore to Rs 35 crore. Entering margin funding business too is on our agenda. For this, we plan to keep Rs 20 crore aside," Reddy said.