Sharekhan Eyes Client Base Acquisitions

Sharekhan.com, the online trading portal from SSKI, is evaluating the possibility of buying out clients or depository bases.

Shankar Vailaya, chief operations officer of Sharekhan.com said: "We are looking at acquisitions. But this does not mean that we are buying out any portal - we are only looking at expanding our client base."

Incidentally, HSBC's private equity arm which has a stake in the portal is also planning to stay invested for now. In August last year, the foreign investors in the portal, including the HSBC private equity arm, had given the promoters of the trading site two options -- either to change the management or opt for a stake sale. The promoters decided on the change in management and indications are that the foreign investors are, at least for the moment, satisfied with the change in management.

 

Meanwhile, Sharekhan is in the process of setting up branches to increase distribution. This is part of the company's restructuring plans which started some time in September 2001. "The setting up of the branches is to bring about synergy between the online and offline businesses of the portal," said Jaideep Arora, head, online channel. "The branches will work as the back bone for sub-brokers in these areas and also offer direct services to high networth individuals," he added.

High networth individuals are an important segment which cannot be ignored, he said, since they provided the bulk of the numbers and volumes.

Sharekhan's average trading volume on the online front is Rs 5-7 crore per day whereas the offline business clocks Rs 150 crore on average. On the online front, Arora said the portal is expecting trading volumes to double soon.

Sharekhan has already set up 15 branches of which are 10 are operational. The company has invested close to Rs 2.5 crore to set up these 15 branches. The 10 branches contribute almost 50 per cent of the company's revenues. It is looking at another six to seven branches by the end of the year.

Sharekhan.com is focusing on the southern market. "We need to make a dent there," said Arora, adding that the company would set up four branches in the south.