Financial Daily
from THE HINDU group of publications

Wednesday, July 11, 2001



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Investment Trust plans to venture into stock broking

Nilanjan Dey

KOLKATA, July 10

INVESTMENT Trust of India Ltd, sponsors of Kothari Pioneer Mutual Fund, has proposed to branch out into stock broking and distribution of financial products.

The company has identified some of its branches -- it has 38 -- to begin stock broking services. It has also proposed to operate as an intermediary for mutual funds and insurance, especially to retail customers.

The plan to diversify into these areas is expected to help the company expand its range of operations, said Mr Sanjay Maloo, Director of TCK Finance & Leasing Pvt Ltd, the Kolkata-based company that has recently become the majority shareholder of Investm ent Trust.

The distribution plan would depend on tie-ups with various asset management/insurance companies. In mutual funds, Investment Trust has proposed to enter into arrangements with various fund houses to vend their schemes.

At the same time, the company would look at increasing its fund-based operations: Its fund-based portfolio now stands at around Rs 100 crores.

The current state of the capital market would not really affect the company's diversification move, Mr Maloo felt. ``Given the recent developments on the stock exchanges, the broking business is down. A number of big brokers have rolled back their operat ions, and investors could well bank on small, but niche, broking firms like us,'' he said.

As for retailing of funds, the company is aware that debt funds, in the present context, would sell more than equity-oriented products. At the moment, sentiments of investors are in favour of the relatively risk-free debt/fixed-income than equity -- an a ttitude that is getting reflected in the mobilisation figures being recorded by mutual funds.

The company has also proposed to offer various specialised loan products, including finance packages for travellers. However, it is aware that it would face stiff competition from established players, including banks, in the travel business.

As a strategic investor, TCK Finance & Leasing would like Kothari Pioneer's fund management business be handled by professionals. The mutual fund, according to Mr Maloo, has a wide range of products, with substantial assets under management.

``There is always room for more, and we would see if investors could be given a better fare in terms of products, performance and service. Having Pioneer as the co-sponsor is an advantage,'' he told Business Line, referring to the US-based Pioneer Invest ment Management's core competence. Pioneer's recent takeover by UniCredito Italino, an Italian banking group, would ultimately help the mutual fund venture in the country, it is felt.

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