He is neither a bull nor a bear in the stock market. In fact, he does not invest in stocks. But strangely C. J. George MD, promoter and founder of Geojit, is one of the most defining names in the world of financial services. As his company, Geojit BNP Paribas, turns 25 he basks in its glory, which, in the first decade of 2000, was placed along with the likes of Infosys, Sensex, Bollywood, Simputer, Wine and Big Bazaar. A market watch selected the company to be among the top 29 wealth creators in the country in the last ten years.
More than all this George’s most significant contribution perhaps lies in the fact that he offered the Indian investor complete transparency in ways to manage their equity investments.
His company has a lot of firsts to its credit - Geojit was one of the first pure broking firms in the country to go for a public issue. It was the first to begin online trading facilities; the first to start the franchise model of sub-broking that was later chosen by SEBI (Securities and Exchange Board of India) as the model for decentralised operations; the first broking firm to have JVs (Joint Ventures) with countries in West Asia, and the first to begin an online commodities exchange for futures trading in pepper, cardamom, gold and silver.
A pioneer
“When you try to understand the needs of clients and find solutions for that and if you are in a hurry to solve their problems you will indeed be the first always. I am only disappointed about things that we could not do for our clients as the first one,” is George’s simple answer to his pioneering achievements.
But being first also meant treading on virgin ground. Coming from an agrarian family in Pothanicad (Kothamangalam) the whole scene was new to George, who graduated in commerce from Kerala University. Sitting in his elegant office in Kochi, George smiles and recalls an incident from those early years. On the train back from Delhi, where he worked as financial analyst in a broking firm, Batlivala and Karani, a fellow traveller asked about his job. To his reply that he worked in the stock market the curious co-traveller wished to know what he stocked. It was this lack of awareness about the financial market that George would later turn to his advantage and create a brand.
Reminiscing about the growth of his company, he says, “I must admit that the timing was perfect. Geojit was born at a time when India was opening the market economy and we could take advantage from the growth of markets while being fair to everyone.”
The February 85 budget was the turning point that set the markets booming. The Cochin Stock Exchange was founded and he borrowed Rs. 2,000 from his employer.
“I had no plans to start a stock broking firm,” he says. After he quit his job he was encouraged by a friend, who ran a Forex business, to start a broking business. He did so opening an office in a “shed in his friend’s garden.”
The infamous Harshad Mehta scam unleashed a period of uncertainty in the market. Yet George was keen to expand. The sub-broker was a curse of the system, he says, and wished to reconstitute the structure of functioning. He set up branches in Muvattupuzha and Thrissur. He began travelling across the State on investor education programmes. In 1994, the company was reorganised in a corporate form, another first, and named Geojit Securities Ltd.
Going public
To grow bigger George took membership of NSE (National Stock Exchange) which came with a membership fee of Rs. One crore. He knew that NSE was the future and that Geojit had no capital to expand. He decided to go public. KSIDC, (Kerala State Industrial Development Corporation) after due diligence, agreed to invest 22 per cent stake. On October 17, 1995, Geojit & Co went public. George laughs when he recalls the D-Day. “A leading financial newspaper carried a report that read something like this: Another fly by Night Operator from Kerala.” In the trading hall of the CSE, he overheard disparaging remarks about the audacious move from a “small fry” that would fail. But it did not dampen his spirits. The IPO was oversubscribed eight times in Kerala and 15 times in India.
To these pioneering achievements, the unassuming George has a simple answer.
It is here that George turns emotional and recalls the words of his friend and a renowned broker from Mumbai, Pankaj Shah of D. A. Shah and Sons. Since George was an “outsider” in the stock market, Shah, who was on the board of Geojit, introduced him to his friends in Mumbai declaring that he will stand by George in the case of any eventuality. “Tears came to my eyes”, he says about a friendship that boosted his role in the market.
From then on Geojit grew its investor base to over a lakh clients. NSE terminal was started in Kochi. Another turning point was the dematerialisation of physical share certificates. Geojit was ahead once again. George says he continued travelling educating investors on the efficacy and transparency of Demat. “It was an evangelical exercise, difficult to convince but it paid off. At one point 15 per cent Demat accounts were from Kerala, thanks to our efforts,” he says with pride about a fact that gave visibility to Kerala market nationally.
The inadequacy of phone lines for servicing 5,000 clients, a complaint brought to notice, egged George to search for a solution- the Internet. Geojit started online trading in 2000. Today, 50 per cent of their orders come through the Net. This was followed by Geojit’s franchise model being approved by SEBI for sub-broking throughout India.
George says that coming from Kerala he faced another hurdle of effectively servicing his clients in West Asia. A JV with licensed outfits in UAE countries, Geojit spread its wings to the Gulf becoming the only Indian stock broking company in retail to have offices there. But there was no stopping George. In 2005 he started “dating BNP Paribas” the French financial giant. Two years later BNP picked up 33.5 per cent of stake in Geojit and the company acquired a global status.
Strangely, George remains detached from the growth. He credits his acumen to his farming background. “A farmer works hard without knowing either the size of the harvest or the price when the harvest is ready. I am of the view that an average farmer takes much more risk and this background helped me to work hard and then be contented with what I get.”
Another inspiration has been his father’s Communist leanings. “My relative detachment towards religion and wealth has its origin in that influence,” says George, who believes in giving freedom of choice to his two sons on the course of their careers. His wife Shiny, a professor of Statistics in a college in Kothamangalam, wishes for his ‘retirement’ so that they could spend more time with each other.
And all the success? “That’s because of having extraordinary people with me. That’s luck I must say.”
