PNB Gilts targets 25% growth in FY11 over FY10

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PNB Gilts targets 25% growth in FY11 over FY10

In an interview with CNBC-TV18’s Udayan Mukherjee, DVSSV Prasad, managing director of PNB Gilts spoke about latest happenings in his company and the road ahead.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See latest News about PNB Gilts See previous management interviews See what other Experts & Brokerages are saying about PNB Gilts PNB Gilts BSE | NSE 29/05/12 Are Mutual Funds betting on PNB Gilts?

In an interview with CNBC-TV18's Udayan Mukherjee, DVSSV Prasad, managing director of PNB Gilts spoke about latest happenings in his company and the road ahead.  

Below is a verbatim transcript of the interview. Also watch the video.

Q: How significant a boost is this for business for PNB Gilts-the raising of the investment limits for FIIs?

A: It will open up the trading opportunities in the government sector and as far as corporate bond is concerned it gives a chance of about USD 5 billion, almost Rs 22,000-23,000 crore coming into the market. So once again they are good opportunities for PNB Gilts to do well.

Q: You have got a 7% market share in this business. You see significant pickup in trading volume because of the additional investment limit now?

A: Particularly in corporate bonds there will be additional volumes which will help us.

Q: Can you quantify what you think the boost in business could be materially in terms of volumes and impact on revenues?

A: That could be a long call and getting how much, but it will definitely add to our volumes.

Q: You have also been trying to get into some of the other spaces like equities and derivatives. How far have your plans progressed along in those markets?

A: It has progressed. We have started the equity and all from June. We are doing well in that thanks to the rising Sensex. We are also into primary markets. That also is doing well as you all can see and we hope to do well in that segment. In addition, there are a lot of other opportunities that are coming forward in our way like the Reserve Bank is very serious about introducing the repo in corporate bonds. That's again an opportunity.

We are also looking for the interest rate futures, which the Reserve Bank is interested to introduce even for the smaller or rather the shorter-term maturities. That will open up further opportunities and derivatives market. Recently, in fact, the Reserve Bank sought our opinions on how to give you access to the various PF trust that are operating in the country. That will again add to our volumes and our opportunities to grow.

Q: So all of this put together, do you think it's reasonable to expect a 25% kind of growth for PNB Gilts over last year?

A: That is what we hope for.

Q: 25% growth?

A: Around.

Q: The merger with PNB-all that talk is behind you finally. There is no question of that progressing, right?

A: Our Chairman has clarified that, as of now, there is no such thing. That's again another opportunity for us to grow. Ours is a financial securities market. Our fortunes depend upon the natural or the general direction of the interest rates, the volatility in the market and the volumes.

So your guess of interest rates in the market and then the other opportunities we talked about and then the general volatility that is there in the market we have seen. If you have seen last march we have closed at 7.85% and then we have seen as high as 8.10% and then between, we did up to 7.37% and again rose up to 8.10-8.09% and then aging today we are at 7.83%.

So there is volatility and then if the general direction of the interest rate as is predicted by Reserve Bank or the government is also southwards. It will definitely boost the incomes and the business volumes.