Investment Trust of India (ITI), the equal equity participant in Pioneer ITI Asset Management Company with the US mutual fund Pioneer, intends to foray into stock broking as well as expand its leasing and hire purchasing activities.
The future business proposition of ITI is aimed at transforming the company to a service-based firm from its current dependence on fund-based activities.
The future plan is linked with the company's proposed pulling out of Pioneer ITI AMC simultaneously with Pioneer. However, both ITI and Pioneer have decided to continue with the asset management company (AMC) if a sale deal does not materialise.
Sources said Rabo India has been appointed to do the match-making for the AMC. It currently manages Rs 3,820 crore of assets for over 7,43,000 investors.
Rabo India, which is in talks with almost all global mutual funds interested to set shop in India, is expected to close the deal shortly. Industry sources said the pricing of the Poineer ITI AMC could be in the range of Rs 350 crore.
It was the first mutual fund in the private sector and was now ranked No. 4, after Prudential-ICICI, HDFC and Birla Mutual Fund.
ITI has recently launched a stock broking office in Chennai and would spread its network in other parts of the country as well, sources said.
In addition, the business of Rs 40 crore under the leasing and hire purchasing would be expanded. The management of ITI, which was promoted by the H C Kothari group but later taken over by the city-based TCK Finance & Leasing Private, was of the view that there existed "immense opportunity in the stock broking business so far largely dominated by the local stock brokers".
Sources added, "In a word, the stock broking business is not institutionalised and this provides growth opportunities for big ticket players with a countrywide network. ITI will do institutional business as well as retail stock broking."
Similarly in the leasing and hire purchase business, ITI is gearing up to introduce "innovative" products to give competition a run for money.
