Steel City focusing on mutual fund business

Visakhapatnam-based Steel City Securities Limited (SCSL), a leading stock broking companies in the state, is now giving more thrust to mutual fund (MF) business to increase its revenues this financial year.

"In spite of the depressed capital market conditions over the last one month, our revenues have marginally increased during this financial year as compared with the last year," SCSL executive director G Rajagopal Reddy told Business Standard.

Last year, SCSL earned a net profit of Rs 7.23 crore, and is expecting its net profit to cross Rs 10 crore in the current year.

"We have set up a separate wing for mutual fund business and engaged some MBA graduates for marketing MF products. We, therefore, are aiming at garnering over Rs 10-crore business from MFs as compared with Rs 2 crore in 2005-06," Reddy said.

The stock broking firm, which till last year restricted the mutual fund business to its Vizag office only, has decided to extend it to all its 270-odd branches across the country with a view to expanding its revenue significantly.

Keeping this growth in mind, the company has recruited 73 new candidates in the last two-and-a-half months, taking the total staff strength to 390, according to Reddy.

"Our second thrust area is to increase the number of depository participant accounts for more revenue generation," he said.

The company currently has about 79,000 demat accounts. After the Securities and Exchange Board of India (Sebi) imposed restrictions on the activities of some broking companies, many investors were approaching SCSL for opening new demat accounts, he said, adding that the firm recently increased the fee on share transactions from Rs 16 to Rs 25.

While claiming that the fee was still lower than that charged by other broking firms, Reddy said that the move would help SCSL increase its revenue further.