Geojit is now better placed to serve a larger population of NRIs
Cross continent partnership will enhance synergiesOpen offer to Geojit shareholders likely within a week
MUMBAI: The French banking major, BNP Paribas, on Tuesday became the largest shareholder of the South-based Geojit Financial Services Limited as Geojit issued 5.68 crore shares and 2.28 crore warrants to BNP Paribas.
The name of the company will be changed to Geojit BNP Paribas Financial Services Limited. However, there is no change in the management team and the business will continue to be managed by the current team headed by C. J. George, Managing Director. BNP Paribas will have three directors on the board of the new company.
With the allotment of shares, BNP Paribas gets 27.18 per cent stake in the company. The Re 1 face value share is now allotted at Rs. 26. The company also issued 2.28 crore warrants which could be converted into equity shares at the same price after 18 months. After conversion, the stake of BNP Paribas in the company will be 34.35 per cent.
By joining the global network of BNP Paribas, Geojit will be in a position to serve a large number of Indians who live outside India, apart from gaining knowledge from BNP Paribas' position as the market leader in online brokerage in continental Europe, Mr. George said.
This additional capital will be utilised for expansion of business in West Asia, branch expansion in India and strengthening the financial products distribution division.
Geojit BNP Paribas will be able to combine the expanding branch network, technology and management capabilities with the brand image, international experience and product profile of BNP Paribas.
Commenting on the future of the company, Olivier Le Grand, Head of BNP Paribas Personal Investors, Paris, said: "With this strategic cross-continent partnership, we will capitalise on Geojit BNP Paribas's strong experience in brokerage and asset gathering to accelerate development and generate synergies in fast growing markets.''
The preferential allotment will be followed by an open offer to Geojit shareholders which is likely to be made within this week.
"We are thinking on the price of the open offer but it is a long term wedding and not just a float,'' Mr. Grand said, adding that there was no intention of delisting Geojit as of now.
The open offer could, however, increase the BNP Paribas stake to more than 50 per cent.