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  • Business
    Peerless Group chalks out fresh roadmap

    CHENNAI: Having seen 75 summers, Kolkatta-based Peerless Group has chalked out a fresh roadmap that will see it make a foray into mutual fund, life insurance and credit card fields.

    These diversifications are a part of a strategy, driven by the exigencies of time and changes in the regulatory environment, to gradually give Peerless brand a broader profile than let it be known largely as a residual non-banking finance company.

    An indication of the Group's search for a broader brand profile for Peerless is already evident from the floatation of assorted subsidiaries, marking its entry into areas such as hotel, broking, financial product distribution and healthcare.

    In an interaction with this correspondent, S.K. Roy, Managing Director of Peerless General Finance & Investment Company Ltd., said the Group had just begun distributing mutual fund products. However, the Group was keen to run a mutual fund of its own. This would be facilitated through its subsidiary - Peerless Securities Ltd - which had already got an in-principle approval for floating an asset management company from the Securities and Exchange Board (SEBI) of India. He was confident that a final approval would come sooner than later. The Group has a presence in over 150 towns across the country. It has been present in Andaman for over a quarter century now and also as a foothold in Jammu and Kashmir. ``We are a pioneer in collecting small savings and distributing financial products,'' Mr. Roy said, justifying Peerless's move to set up an asset management company. Mr. Roy said though many foreign companies had queued up for alliance, nothing had yet been decided. Addressing shareholders recently, D. Basu, Chairman, Peerless General Finance, said, ``If developed successfully, such business (mutual fund) will enable the company add significantly to the brand image.''

    Mr. Roy said Peerless was watching the life insurance scene and hinted that it might get into the life insurance business sometime in the future. A subsidiary company, Peerless Developers Ltd., is already distributing the insurance products of Max New York Life Insurance Company. It has just initialled an agreement to distribute the products of IFFCO Tokio General Insurance Company Ltd. Peerless, it may be recalled, was in the life insurance business before it was merged with the Life Insurance Corporation following the nationalisation of life insurance. Since 1957, it has been a residual NBFC. Fielding a range of questions, he said the Peerless board had also cleared proposal to distribute a co-branded credit card with State Bank of India. He expected the credit card distribution to commence by the first quarter of next year.

    These diversifications should also be read in the context of the tightening of regulatory framework for residual non-banking fiancÚ companies by the Reserve Bank of India. The apex bank had, according to Mr. Basu, advised Peerless to ``explore alternate business model and migrate to such a model with a period of three years.'' Mr. Basu, during his speech at the shareholders' meeting, had said that the RBI move meant that ``the company, as a residual non-banking finance company, would not be accepting new deposits on the expiry of the said three years.'' Peerless had since moved the RBI, seeking longer transition period. The challenges posed by the transition to a new business model were daunting, Mr. Basu said. A comforting feature, however, was that the company ``stands on a firm financial footing now,'' he added.

    Total collections of Peerless stood at Rs.1,028 crore during 2006-07. The net owned funds stood at Rs.693 crore as on March 31, 2007. Maturity payments to depositors totalled Rs.12,809 million. And the cumulative payments over the years stood at Rs.141681 million as at the end of March 2007.


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