Steel City looks for strategic investor

Steel City Securities Limited (SCSL), a stock broking company in the north coastal Andhra Pradesh, is scouting for a strategic investor to expand its branch network.

"Initially, we had planned to raise funds through an initial public offering (IPO) and submitted our application with the Securities and Exchange Board of India (Sebi). Later we changed our plan and are now looking for a strategic investor, who can invest Rs 40-50 crore for our immediate requirements," G Rajagopal Reddy, executive director, SCSL, told Business Standard.

The company plans to add 130 new branches across the country, mostly in the four southern states. "We would take up the expansion as soon as we get a strategic partner," Reddy added.

The company would also provide some funds to its members to increase their margin trading. "At that time we expect our yearly revenues to go up to Rs 100 crore with Rs 30 crore net margins," he added.

He said a few companies had expressed their interest in joining hands with SCSL and the company would soon finalise the strategic partner.

SCSL currently operates 270 branches across the country of which about 70 per cent are in Andhra Pradesh. Last fiscal, SCSL registered a net profit of Rs 4.38 crore while its daily trading turnover was between Rs 120 crore and Rs 150 crore.

"Now, due to bullish trends in the stock market and expansion of network, the trading turnover has increased to Rs 500-600 crore a day," he said, adding that the company was expecting a net profit of around Rs 9.5 crore with Rs 34-35 crore revenue this year.