My notes on A. K. Capital. These may be a little dated as I had prepared them sometime ago. And I am just explaining about the company here and not getting into the numbers, which are available from many Web sites and annual reports of the company. Needless to say the company has an excellent balance sheet and has been growing well year on year, which is why I even bothered to look into it in more detail.
A. K. Capital Services Limited is the flagship company of AK Group. A. K. Capital is Indiaâs leading SEBI registered Category - I Merchant Banker engaged in providing various fee based services such as fund mobilisation through issue of debt, equity, structured hybrid instruments and through loan syndication, etc for various Central & State Government Undertakings, Private & Nationalised Banks, Financial Institutions & Private Sector Corporates. In a very short span of time emerged as one of Indiaâs leading Merchant Banker for the Indian Corporate Debt / Fixed Income Securities market through Private Placement / Public Issues and for Management Consultancy, Advisory Services, Financial Restructuring, etc. In the Year 2007, A. K. Capital Services Ltd won the Prestigious International Financing Review (IFR), Asia Bond Deal of the Year 2006 Award in Hong Kong for successfully structuring & placing Rs 1,500 million perpetual bond issue for UCO Bank, one of the leading Public Sector Bank in India. The company is also winner of âEntrepreneurship Excellence Award 2010 â for development of Indian bond market.â
A. K. Capital has been playing a pivotal role in debt market private placements for banks, the government and other financial institutions, is one of the biggest competitor of Mumbaiâs oldest brokerage house Darashaw & Co. A. K. Capital had consistently been there in the top two arrangers of debt through the private placement route for six consecutive years from FY03 to FY08. AK group has a dedicated team of over 125 qualified professionals spread in length as well as breadth all over the country specifically focusing on marketing and sales of Bonds, Debentures and other Financial Products to ensure coverage of maximum spread of Investors. AK group has coverage through its professionally managed offices at all Metros and major Sub-Metros of the Country including Mumbai (Head Office), New Delhi, Bangalore, Kolkata, Hyderabad, Chennai, Ahmedabad, Pune, Coimbatore. The Company had two subsidiaries at the beginning of 2009, A. K. Stockmart Private Limited and A. K. Capital Corporation Private Limited. During the year Girdhar Vanijya Private Limited became subsidiary of the Company. The company has acquired 70.83 percent stake in a non-banking finance company (NBFC), Girdhar Vanijya, for Rs 1.48 crore. Through the NBFC, A. K. Capital has started an investment banking unit for the bond market.
The Company with its subsidiaries offers a range of financial products and services as follows:
Corporate debt raising through private placement of bonds and debentures, initial public issue of bonds and debentures, project financing and working capital finance.
Investment banking including raising equity capital through Initial Public offerings (IPO), Follow on Public offerings (FPO), Rights Issues, Qualified Institutional placements (QIP). The equity capital market activities involve providing advisory and placement services pertaining to the raising of equity and quasi equity funds for its corporate clients.
Stock broking and Distribution services include offering products such as equities, derivatives, depository services, distribution of mutual funds, etc.
Investment in bond and debentures through treasury operations.
Brand Image - A. K. Capital Services Limited is one of the leading domestic financial services group in India. This category I merchant banker has well established Brand which has been built over the years.
Market Share - A. K. Capital has 32% market share in private debt placement. During last year market share of debt mobilization by the company for Government Organizations and Financial Institutions stood at 42%, for PSU and PSU Banks stood at 29%, for Central and State Government Undertakingsstood at 22% and for State Government Undertakings and State Level Financial Institutions stood at 23% and for private sector companies stood at 8%. The Company’s focused approach, strong liquid balance sheet, cost efficiency, risk management and diversified income streams has helped it grow year on year.
Expanding Corporate Bond / Debt Market - By now its a known fact the the corporate bond / debt market is growing well in India. It has been growing at over 34% CAGR for the last three years. We have seen an increasing number of corporates issuing bonds and raising debts in the open markets in the last year and current year, which augers well for the company. As of now the company is an undispited leader in this space.
Last, but not the least, I feel that the consistent growth in revenues, and increase in market share, makes the company’s stock ideal for P/E re-rating too.