Roadshows make way for teleconferencing

Not too many corporate chiefs are heading for the US and Europe after announcing their results this time to hold roadshows for global investors. The reason is that conference calls are fast replacing roadshows.

And definitely this is not a fallout of the fringe benefit tax (FBT) imposed on travels in the Union Budget.

Apart from reducing the cost, video teleconferencing ensures a reliable communication link with the investing community. Also, it can be arranged fast without undergoing the logistics nightmare of booking air tickets and hotel accommodation.

According to the heads of various domestic broking houses, interacting with clients and offering value added services have become a 24X7 job.

"Brokerages are organising conference calls to improve their services to the investing community by providing investors access to the management," said Sumeet Mehta, equity research analyst with Fortis Securities Ltd. The outfit recently organised conference calls for Pioneer Embroideries and Alok Industries.

Typically in a conference call, a toll free number is provided by the broking firm as well as the companies to the market participants. All of them join at a specified time and interact with the management on performance related issues.

In an overseas conference call, time zones are kept in mind while selecting the countries from where investors would participate. A telecom service provider says the cost of such a conference could be Rs 70,000-80,000.

A senior executive with ICICI Securities said, "Arranging conference calls is just a part of our overall effort to increase the interaction with our clients on a regular basis. We also take clients abroad for roadshows and arrange one-to-one meetings with investors."

I-Sec had recently organised a theme-based conference called 'Rising Star' where 4-5 small corporates operating in the niche segments interacted with host of domestic as well as overseas investors.

Kalpesh Parekh, research analyst, ASK Raymond James, said: "Conference calls are an efficient way of communicating with a large investor base." ASK Raymond James recently arranged a conference call for Ashok Leyland which was attend by 90 market participants.