SHCIL's strategy to improve productivity

By Our Special Correspondent

HYDERABAD, OCT. 1. With stock market and slowing economic conditions getting reflected in its balance sheet, Stock Holding Corporation of India (SHCIL) has undertaken an exercise to improve productivity through a mix of cost cutting exercises and greater focus on an enriched business mix, including derivates and securities business.

For the year ended March 2001, SHCIL has reported a higher income of Rs. 148.87 crores (Rs. 139 crores), but a lower profit after tax of Rs. 21 crores (Rs. 30 crores). This included a higher other income of Rs. 18 crores (Rs. 13.90 crores).

Announcing the results and giving details of the corporation's strategy at a press conference here, Mr. B. V. Goud, MD and CEO, said in the derivatives segment it has done Rs. 1,800 crores till August-end (Rs. 800 crores) and hopes to do Rs. 12,000 crores for the entire year.

At present, 60 brokers settle their transactions in derivatives through SHCIL as the clearing member. Under securities lending, it has done Rs. 62 crores in the last three months and is confident of touching Rs. 250 crores for the entire year. As of last Friday, the corporation's mobilisation of 8.5 per cent Government of India Relief Bonds crossed the Rs. 1,100 crore mark, he said.

The corporation has also `deferred' the proposal to set up an information technology subsidiary, and instead decided to allow the IT wing to work for outside companies also and become a ``profit centre' within SHCIL. The memorandum of articles was also amended last week to facilitate this, he said.

Mr. Goud said because of competition and falling service charges, though transactions increased, income from operations (Rs. 130 crores against Rs. 126 crores) had not grown much. Back office work for NTPC has been taken up and it hoped to do so soon for pension funds. It also plans to distribute insurance products.

The corporation has 1,400 staff and 195 service centres. Mr. Goud ruled out retrenchment saying they had enough growth plans. However vacancies caused by `resignations' were not being filled up, he said.

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