AK Capital Services Limited makes a corporate announcement

The “Merchant Banking and Debt Market” activity contributed Rs 60.98 Crores in FY24, comprising merchant banking fees of Rs 59.21 Crores and brokerage income of Rs 1.77 Crores. This was up from Rs 56.53 Crores in FY23, an increase of Rs 4.44 Crores or 7.86% YoY ^[1].

• FY24: Rs 60.98 Crores
• FY23: Rs 56.53 Crores
• Change: +7.86% YoY

The growth was positive but slower than the company’s standalone total-revenue growth, which rose from Rs 115.35 Crores in FY23 to Rs 127.20 Crores in FY24, or approximately 10.28% YoY ^{[2] [3]}. Consequently, the segment’s contribution to standalone revenue declined marginally from approximately 49.01% to 47.94%, a derived decline of about 1.07 percentage points.

In the interest-rate context, the annual report identifies interest-rate volatility and monetary-policy tightening as risks to corporate bond-market activity and margins ^[2]. The segment nevertheless delivered growth in FY24, suggesting resilience, but the slower pace than overall standalone revenue indicates that the benefit from the debt-market environment was not broad-based or outsized. The audited disclosure does not separately quantify how much of the change arose from interest rates, transaction volumes, pricing, or mix; therefore, attributing the FY24 performance solely to the rate environment would not be supported.

The FY24 final dividend recommendation implies a cash payout of 16.62% of standalone net profit. The recommended dividend was Rs 8 per share, with total cash outflow of Rs 5.28 Crores ^[4], against standalone FY24 PAT of Rs 31.80 Crores ^[5]. Derived payout ratio: 5.28 / 31.80 = 16.62%.

This indicates a retention-led capital allocation approach: approximately 83.38% of FY24 standalone profit was retained on a final-dividend-only basis. The retained-earnings schedule supports this interpretation—opening retained earnings of Rs 374.63 Crores plus FY24 profit of Rs 31.80 Crores, less Rs 9.24 Crores of dividends recorded during FY24, produced closing retained earnings of Rs 397.19 Crores ^[5].

Two timing points matter:

• The Rs 9.24 Crores dividend charged in FY24 comprised the Rs 3.96 Crores final dividend relating to FY23 and the Rs 5.28 Crores FY24 interim dividend ^[5]. It therefore should not be treated as the FY24 annual payout alone.
• Including both the Rs 5.28 Crores FY24 interim dividend and the Rs 5.28 Crores recommended final dividend, the full FY24 dividend would amount to Rs 10.56 Crores, or 33.23% of FY24 standalone PAT, derived from the two dividend cash outflows and FY24 PAT ^{[6] [4] [5]}.

Accordingly, the 16.62% final-dividend ratio is consistent with the company’s historical preference to retain most earnings, although the full-year FY24 distribution, once the interim and final dividends are combined, represents a higher one-third payout.

AK Capital’s FY24 portfolio yield cannot be credibly classified as higher or lower than FY23 from the reported lines available. The FY24 investment note gives the closing portfolio, but not a matched FY23 portfolio balance and a clearly mapped FY24 investment-income numerator; therefore, a true yield calculation—investment income divided by average investments—is not supportable without creating a proxy.

AK Capital Services

AK’s FY24 standalone investment portfolio was Rs 1,125.93 Crores, of which debt securities were Rs 703.09 Crores, or 62.45% of the portfolio, derived from Rs 70,309.17 Lakhs divided by Rs 1,12,592.72 Lakhs. The balance comprised equity instruments, preference instruments and an alternate investment fund ^[7].

This composition points to a predominantly coupon-oriented treasury profile, consistent with the group’s stated use of G-Secs and highly rated papers in its treasury book, alongside lending and fee income ^[8]. AK was also materially more leveraged than most of the comparison set: FY24 standalone debt securities plus borrowings were Rs 678.73 Crores, against equity of Rs 488.04 Crores, implying a derived gross funded debt-to-equity proxy of 1.39x ^[9].

The key limitation is that the FY24 note does not provide the full FY23 portfolio denominator or a clean FY24 investment-income line. Accordingly, the direction of AK’s FY24 yield change versus FY23 remains undetermined, rather than demonstrably positive or negative.

Peer comparison

Analyst read

• AK sits at the more debt-instrument-heavy end of this group, with nearly two-thirds of its FY24 standalone portfolio in debt securities and materially higher funded leverage than Crest or Fedders ^{[7] [9]}.
• CIFL is the closest structural comparator because borrowings represented 90.22% of liabilities, but its portfolio yield is not separately disclosed in the cited FY24 material ^[16].
• Saraswati illustrates the opposite risk: its FY24 investment-linked returns were dominated by a much smaller fair-value gain than in FY23, highlighting mark-to-market volatility rather than recurring carry ^[13].
• The main conclusion is therefore about yield quality and business-model exposure, not a precise yield ranking: AK appears more carry-oriented, whereas Saraswati is more visibly dependent on valuation movements; Crest, Consolidated Finvest and Fedders are not sufficiently comparable on both leverage and yield disclosure.