Hyderabad-based Karvy Consultants Ltd, eyeing personal financial services in a big way, proposes to double its one-stop shop retail financial services branch network to 50 at an estimated cost of Rs 25 crore in the current financial year.
Karvy has set its sights on increasing its thrust on providing registrar and transfer (R&T) agency service to mutual funds to beat the static growth in business due to dematerialisation of shares. To overcome the nearly flat growth, it recently diversified into the call center business.
Though the growth of the R&T agency business has become stagnant, its relevance continues in view of the fact that still a majority of the retail shareholders continue to hold shares in physical form and the distribution of corporate benefits is outsourced by corporates and mutual funds to the agents, chairman and managing director of Karvy Consultants, C Parthasarathy, said.
"Retail holding in physical form and distribution of corporate benefits such as dividends to shareholders, for which we maintain shareholder database on behalf of companies, will ensure longevity of R&T services," he pointed out. Mutual funds and provident fund advisory services were the two big growth areas for R&T businesses, he emphasised.
Mutual funds, which will be taking up management of pension funds in the country, will restrict themselves to only investment and management of their corpus while the R&T agents will play the supplementary role of maintaining customer database and acting upon the instructions of the funds for delivering corporate benefits.
"Transaction processing is our core strength, hence, we ventured into medical transcription in 1999. This business contributed 5 per cent to the group turnover of Rs 85 crore last year and we intend to develop it as part of our diversification drive," Parthasarathy said.
The company recently set up a 25 suite call center, which is currently in the beta-testing phase.
The company sees proxy vote solicitation and conducting electronic poll among shareholders on important matters affecting the future of companies as areas that will evolve in India as in the US. "R&T agents could play a facilitating role in such matters," Parthasarathy explained and added that R&T business will only grow by fits and starts and witness consolidation in the country.
However, he ruled out any acquisition of small and medium sized R&T agencies as promoters of these businesses were asking a very high price.
