Thiruvananthapuram - India-based leading retail broking house Geojit and French banking major, BNP Paribas, have struck a strategic cross-continent partnership to form Geojit-BNP Paribas Financial Services Limited, with major focus on the West Asian financial market.
A release here yesterday said Geojit director board issued 56.8 million shares and 22.8 million warrants to BNP Paribas, making it the largest shareholder in Geojit Financial Services Limited. The current team headed by C JGeorge, managing director, will run the business.
With the allotment of 56.8 million shares, BNPP gets 27.18 per cent stake in the company. The Re1 face value share has been allotted at Rs26. The 22.8 million warrants could be converted into equity shares at the same price, raising the stake of BNP Paribas in the company to 34.35 per cent.
C JGeorge said that by joining the global network of BNP Paribas, Geojit would be in a position to serve a large number of overseas Indians. The additional capital would be utilised for expansion of business in West Asia, branch expansion in India and strengthening of the financial products distribution division.
Geojit BNP Paribas would be able to combine the expanding branch network, technology and management capabilities with the brand image, international experience and product profile of BNP Paribas.
Olivier Le Grand, Head of BNP Paribas Personal Investors, Paris, said the strategic partnership "will help us capitalise on Geojit BNP Paribas strong experience in brokerage and asset gathering to accelerate development and generate synergies in fast growing markets", the release said.
Geojit has offices in Muscat, Dubai, Abu Dhabi and Sharjah through its joint venture Barjeel Geojit Securities LLC.
The company, along with partners from Saudi Arabia, Oman and UAE, is setting up another retail brokerage company in Saudi Arabia after getting brokerage license from CMA (Capital Market Authority) with a capital of SR100m.
This joint venture company targets 10 per cent market share in the Saudi domestic market with 15 branches in a medium term view.
Geojit was the first to introduce internet trading along with many other firsts in the equity and commodities trading in the country. It has a network of over 400 offices and manages R 60 bn worth of assets for a customer base of 250,000 clients.
For the 9 months ended December 2006, Geojit recorded net profit of Rs 194.7 million on an income of Rs 976.5 million and declared an interim dividend of 40 percent, the release said.
By John Mary
© The Peninsula 2007
