BNP Paribas picks 33.35% stake in Geojit for Rs 207 crore
The French banking group BNP Paribas has picked up 33.35 per cent equity stake in the Kerala-based retail broking firm Geojit Financial Services for Rs 207 crore.
The board of directors of Geojit on Sunday decided to issue, on a preferential basis, up to 7.96 crore equity shares to BNP Paribas at Rs 26 per share, the company said in a statement here today.
The preference issue will be in equity for up to 26 per cent and the balance in warrants convertible into equity. BNP Paribas will have to make an open offer for another 20 per cent stake.
After the preferential offer, the stake of promoter C.J. George and family will come down to 24 per cent from the present 38 per cent. The holding of two other large investors KSIDC, a Kerala Government undertaking, and the Mumbai-based investor Rakesh Jhunjhunwala will also be down to about 10 per cent each.
According to an analyst, BNP Paribas’ investment in the company is significant as this could be one of the biggest foreign investments in an Indian retail broking firm. The French group has become the single largest shareholder in the company. Major joint ventures in broking firms with foreign partners such as JM Financial and DSP Merril Lynch generally cater to institutional investors. Geojit has 4.25 lakh customers, of which a majority are in the retail category, the analyst said.
BNP Paribas has been expanding its operations in financial services in India. Geojit, a 20-year-old broking firm with a retail network of 380 offices in 17 States in the country, also has an overseas presence.
For the year ended March 2006, the company recorded Rs 101.79 crore revenue and net profit of Rs 22.71 crore.
Geojit shares closed at Rs 24.95 on Saturday on the BSE.
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