Speaking to The Financial Express, executive director of KMFL Shivaji Dam said that in a change of business plan, the company was scouting for a partner to enter the life insurance sector.

``We had to change our plan not to have a partner to undertake insurance business on the basis of the guidelines issued by the Reserve Bank of india,'' he said adding that the company will be needing two partners as KMFL will hold 50 per cent in the insurance venture.

At present the company is short of Rs 25 crore which is expected to be compensated by June 1, 2000 out of its quaterly profit to meet the capital requirement of Rs 500 crore to enter insurance sector. Dam also revealed that the NBFC major has added an asset reconstruction division (ARD) which will be assigned to recover the deafulted amount of other corporates. ``We are talking to few banks and other corporates to take up assignment from them which have outstanding from other corporates,'' he said.

Considering the huge non-performing assets in the banking system, such business looks quite lucrative, Dam said. The company has also started the private equity business worth Rs 150 crore through a special purpose vehicle for a few investors.``The company is managing the select investor's funds,'' he said.

The company's investments in shares of Fascal amounting to 11 per cent worth of Rs 60 crore, Business Standard at 50 per cent worth of Rs 28 crore and Matrix Information service, a wholly-owned subsidiary of KMFL are doing well and significant improvement in valuation is expected during the year.

Dam predicted a massive merger and acquisition activities in cement and telecom sector during the year. The company has remained conservative in investing in new economy stocks though they have already invested in few dotcom companies. The company's subsidiaries have also performed well during the year. Kotak Mahindra Capital Company (KMCC) - the investment banking subsidiary, has reported a net profit of Rs 35.02 crores during the year.Kotak Mahindra Primus (KMP) has increased its disbursement volume to about Rs 750 crores and has reported a net profit of Rs 3.70 crores for the 15-month period ended March 31, 2000. Kotak Mahindra Asset Management Company (KMAMC) has within 15 months built up an corpus of over Rs 1,000 crore with over 100,000 investors. KMAMAC expects to grow aggressively in future.

The company's EPS for the year is Rs 13.31 on a fully diluted basis (Rs 16.62 on the weighted average capital base). The book value of the company is Rs 104 on the expanded capital base.

According to Dam, there has been a significant improvement in the performance of the company as compared to the previous financial year due to buoyant capital market, growth in the retaiil financing business and aggressive recovery of the non-performing business.