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M. Ramesh

To invest Rs 36 crore in Aloula Geojit Brokerage Co

Chennai , Nov 8

Sensing a big growth in demand for mutual funds and insurance products, Geojit Financial Services Ltd plans to hire about 1,000 people over the next one year for marketing them.

"There is not much money in manufacturing (financial products), but there is a lot of money in distribution," the company's Managing Director, Mr C J George, told Business Line today, when asked if Geojit itself would set up a mutual funds company.

The company and its subsidiary, Geojit Commodities, are corporate agents of ICICI Prudential and MetLife. Mr George pointed out that retail investors were getting into mutual funds more than earlier and that was an opportunity for distributors of financial products.

He said that Geojit would invest Rs 36 crore for its 30 per cent stake in Aloula Geojit Brokerage Company, a Saudi Arabia-based joint venture of Geojit and Al Johar group of that country. Both partners will hold equal stakes, while the rest would be held by high networth individuals and institutions in West Asia.

Pointing out that West Asia was the region that held the largest NRI population (2.5 million), he said that Geojit would send 80 of its employees to work in the Saudi joint venture.

Further, Geojit's other joint venture - the Dubai-based Barjeel Geojit Securities - is likely to get a licence soon for trading in securities of UAE-based exchanges also. Till now, clients of Barjeel Geojit could trade only on international exchanges. Geojit Financial proposes to invest Rs 10 crore in this joint venture.

Geojit is raising Rs 207 crore by issuing shares to BNP Paribas for 26 per cent stake in the company (which would eventually go up to 33 per cent after an open offer by BNP). These funds come in handy in making investments in West Asia.

The rest of the funds raised from BNP would be used in expanding and strengthening of Geojit Financial's operations, in expanding its branch network and technology, Mr George said.

At present, Geojit has 388 branches across the country and a client base of 4.25 lakh customers, 13,000 of whom trade on the commodity exchanges.

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