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Emerging companies - Mid caps that can become large cap
The Equity Desk Forum :Investment Ideas - Creating winning portfolios! :Emerging companies - Mid caps that can become large cap

Topic: India Infoline - Its All About Money,Hone

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smartcat
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Joined: 29/Mar/2007
Location: India
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Posts: 4243

Posted: 25/Nov/2007 at 11:39pm

I want to understand what goes into expansion of a brokerage business of companies like IndiaInfoline. Now this company will generate a PBT of Rs. 180 crores in FY08 with 600 branches and 3 lac customers.

My question is - what kind of expenses does this brokerage company have to bear to service, say, 5 lac customers? More branches and hence more people? Are there any fees to be paid to NSE/BSE by Indiainfoline for servicing the extra 2 lac customers?

What I'm trying to figure out is the scalability of a brokerage business with the available infrastructure. If the majority of next 2 lac customers are those who trade online rather than visiting the branches, isn't there a possibility of massive margin expansion and incremental profit gains?

I really don't know how it is in the developed markets, but I assume most of the trading is done online by the customers sitting at home. If India is also moving there, brokerages like IndiaInfoline could see incremental gains with the existing infrastructure.

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deveshkayal
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Joined: 04/Sep/2006
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Posts: 3903

Posted: 25/Nov/2007 at 11:46pm

Branches are not just for trading. One sells other financial products like Insurance, Personal Loans, etc..

"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

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xbox
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Joined: 10/Sep/2006
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Posts: 2001

Posted: 25/Nov/2007 at 4:33am

Originally posted by deveshkayal

Branches are not just for trading. One sells other financial products like Insurance, Personal Loans, etc..

If that is the case then demerger of lending business will never happen. Indiabulls from starting only put financials and broking at different offices.

Don't bet on pig after all bull & bear in circle.

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deveshkayal
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Joined: 04/Sep/2006
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Posts: 3903

Posted: 25/Nov/2007 at 10:52am

India Infoline to Sell 26% stake in distribution subsidiary for $100 mn. Leading investors like GS and Blackstone are in final negotiations. (ET)

------------------------------------------------

This values the distribution arm at around 1600 crs. Times Group holds 2% stake so this news might be true.

"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

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jstk
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Joined: 14/Sep/2006
Location: India
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Posts: 191

Posted: 25/Nov/2007 at 10:56am

they are the largest corporate agent for ICCI-pru life and for the half year ended sept 30 have done a 51 cr + income ( 19 cr same period last year) .They had done 59 cr + for the full year in 2007 . A large % of the income accrues in the 2nd half. This is annuity income and they have been tripling the Weighted annualised premium income every year for the last 6 years.

If you buy for a non-value reason, you will end up selling for a non-value reason.

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deveshkayal
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Joined: 04/Sep/2006
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Posts: 3903

Posted: 27/Nov/2007 at 9:00pm

What's buzzing here ?? up 14.5% in 2 two days....TED effect ??

"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

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basant
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Joined: 01/Jan/2006
Location: India
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Posts: 18403

Posted: 27/Nov/2007 at 9:30pm

The DK effect I think!

'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

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Rinku
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Joined: 06/Apr/2007
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Posts: 313

Posted: 27/Nov/2007 at 9:49pm

In same Space - On some Site I have read ILFS investmart is highly highly undervalued?Any views Diveyeshji,Basantiji,Vipulji,Omshivbhayyaji..etc

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