UP trading firm spreads wings

Managing Director Padam Kumar Jain told Business Standard India's primary investing state was Gujarat. "Therefore we plan to spread in the state after establishing our centre in Ahmedabad. The centre is set to start operations shortly," he said.

In the last fiscal the company had a turnover of Rs 9.16 crore, of which the crucial is the brokerage income, which has raised Rs.5.41 cr. But this fiscal YE march 2006, it has risen by at least 50 per cent. Although the final figures are not yet ready, but Jain says that the same is true of nett profit that too has risen by the same percentage. Profits after tax was of Rs.67 lakh. This year it is also going to go up.

The company was started by four persons/institutions including three leading brokers Padam Kumar Jain, Shailendra Gupta and Kishore Vakil and the Jagran family, each holding 25% in 1995 . In ten years it has established itself as one of the leading share/commodity trading companies of North India.

It has its own branch in Kolkata which is managed by it, other centres have generally been given out on fra nchise model. There are about 60 terminals and within one terminal all the trading facilities are

Like NSE, BSE and MCDEX and NCDEX are provided through a single terminal, the links are through V-sat. The control centre is located in Delhi being managed by the HCL systems and the head and the corporate office and the management and trading is guided from Kanpur. All major cities of UP have been covered.

"The company is pretty good at share trading, but we are learning the commodity trading," says Jain.

He feels that the trading which has been opened in all commodities suddenly , after a ban of about thirty years, should have been started gradually.

"In 30 years a whole generation has passed , therefore not many are left who understand forward trading in commodities. Now the conduct in the market, for this reason is immature and hence we are moving cautiously," he said.

We are trying to learn it first so we have pegged our trading in commodities at about Rs.200cr a month.

Further expansion will depend on the availability of trained and trusted manpower. We have found that it is better to have one's own branches rather then have franchisee, as both the trust and profits are more if you have your own branches, says Jain.

SPFL besides is also a depository participant and till date has 25,000 accounts. Its branches at Lukcnow, Bareilly, Agra and Kanpur itself handle the DP businesss. Its income from DP in the YE 0march 05 was to the tune of Rs.84.57 lacs.

Its current paid up capital is of Rs.Rs.1.70 cry and reserves and surplus stand at Rs.Rs.3.68 cr. Its loans are of the order of Rs.rs.32 lacs.

The kind of expenses, which are involved in starting a branch, is compelling the company to start thinking in terms of public issue. Technical up gradation and branches they together cost a great deal today. Due to high working capital each branch to be operational costs about Rs.15 lacs and technology up gradation will cost about Rs.1 cr. Thinks will require the company to go to public, says Jain.

But thinking at this point of time is very preliminary. It will take sometime to mature .The thought process on this issue is yet to be fully crystallized.

Looking at the talent 3hich was involved in opening this company , It has delivered on the promise and is likely to go very far.