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Shcil Likely To Hawk Hudco Loans

The Stock Holding Corporation of India Ltd (SHCIL) is likely to sign up a marketing arrangement with the state-run Housing and Urban Development Corporation (Hudco) to distribute the latter's loan products through its branches across the country.

SHCIL managing director and chief executive officer V Biruprakash Goud said the move was a part of the corporation's strategy to explore new avenues to enhance its revenues following the rising competition as well as pressure on margins in the depository service business.

As all the branch offices, numbering over a hundred, are linked through VSATs, SHCIL has got an advantage over other distribution companies to market Hudco instruments.

The proposed tie-up would also help Hudco in fulfilling its target of developing 20 lakh dwelling units a year. Hudco provides finance in developing rural and urban infrastructure.

SHCIL has recently introduced back-up IT services required for broking firms and is planning to distribute insurance products as well as office management of pension and provident funds of various companies.

Sources said the company's application for foray into banking activities was pending Reserve Bank of India (RBI) approval because it did not qualify the stipulated net worth requirements.

According to RBI guidelines, a company is allowed to start banking without having a minimum net worth of Rs 200 crore. SHCIL has a net worth of about Rs 140 crore.

However, the company is hopeful that it will match the RBI requirement for starting banking activities soon.

But it has no plan to go to the markets, at least for now.

SHCIL had shelved its plans for a public listing and stock options to its employees on account of the current sluggish market conditions. The company had earlier planned to offer 60 per cent stake to public.

At present, Industrial Development Bank of India, ICICI, Life Insurance Company (LIC) and General Insurance Company (GIC) hold 16.6 per cent stake each in the company and a small percentage of equity is with the employees.

SHCIL has an in-house software development team comprising over 200 professionals. It was an early entrant in providing Internet based stock trading and securities transfer systems. It has a few thousand investors using this service.

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First Published: Wed, January 23 2002. 00:00 IST