Alka Securities operates in the brokerage business – offering brokerage services and trading in commodities and stocks. Its balance sheet revealed about 10cr in working capital and 4-5cr of liquid investments financed by 5cr of loans. The company currently has investigations initiated against it by SEBI on allegations of circular trading in shares in 2009, which is pending resolution. Meanwhile, the company is barred from accessing capital markets, approaching new customers and raising new finance. The company has lost its existing clients through a period of low retail client participation and the brokerage revenue has shown a consistent decline over the recent past – with no revenue and net losses in the latest quarter (Sep, 2011). Although the company claims innocence, the investigation may be protracted over an extended time period and even a favourable judgment wouldn’t guarantee a restoration of former profits. Moreover, its trading activitie...
An Individual Investor's Perspectives On The Indian Financial Markets