Pnb Gilts Angles For 10% Share Of The Gilts Mart

PNB Gilts Ltd, which had a five per cent share in the government securities market during 2000-01, is targeting to achieve a 10 per cent market share for the current year ending March 31, 2002.

With this anticipated growth, the company's secondary market turnover is expected to surge from Rs 33,000 crore for 2000-01 to Rs 1,00,000 crore during the current year ending March 31, 2002, which would be a 203 per cent growth over last year.

Disclosing this, PNB Gilts managing director Arun Kaul said that his company has already achieved a secondary market turnover of Rs 23,000 crore during the first quarter ended June 30, 2001, which translates to seven per cent market share for the company.

 

Kaul attributed this rapid growth of the company's market share to two factors - its aggressive growth strategy and the first mover advantage that the company enjoys because of the head start it had by being the first to foray into retailing of government securities in the country.

Claiming that PNB Gilts has pioneered the concept of investment in government securities by individuals, Kaul said, "Today we have offices at all the major financial centres in the country. While our corporate office is at New Delhi, we have branch offices in Ahmedabad, Mumbai, Chennai and Kolkata. This has given our company first mover advantage and it is therefore well-equipped to take advantage of the ever-widening nature of the government securities market."

Emphasising that the size of the government securities market would expand rapidly during the coming years, Kaul said, "In the present scenario, in addition to entry of new players, the growth in government securities market is attributable to ample liquidity in the system coupled with poor credit offtake."

With the continuous increase in bank deposits and poor credit offtake, banks are investing heavily in government securities - much more than their stipulated requirement. Moreover, the treasury departments are assuming much greater significance in the organisation, especially the banks, which in turn has a direct and positive impact on the growth of the debt markets, the MD revealed.

With the Reserve Bank of India also in favour of lower interest rate regime and stable macro economic factors, the growth in government securities market is likely to continue, Kaul added.