KOCHI: In a major development in the brokerage services space in the country, French Banking major BNP Paribas may eventually exit from the joint venture, Geojit BNP Paribas Financial services Limited. It is the JV between BNP Paribas and Geojit Financial Services Limited.
The board of directors of the joint venture company on January 22 approved for the execution of a restated Shareholders’ Agreement to be signed between the company, BNP Paribas and the current promoters.
The decision came after six months when BNP Paribas announced that it will acquire broking firm Sharekhan. The name BNP Paribas will also be removed from Geojit BNP Paribs Financial services Limited within six months of BNP Paribas acquiring Sharekhan.
All these will happen once the acquisition of Sharekhan is through. BNP Paribas has taken majority stake in Geojit Financial Services on March 13, 2007.
“While BNP Paribas continue to retain its present shareholding in the company, rights to nominate directors on the Board of the company, affirmative voting/consent rights of BNPP at the Board level and shareholders level and information rights of BNPP would terminate on the date BNP Paribas acquires control of Sharekhan Limited,” the company said.
Analysts are of the view that eventually BNP Paribas will exit from Geojit and the company will persuade shareholders such as Rakesh Jhunjhunwala and others to buy shares from BNP Paribas.
But when contacted, Geojit BNP Paribas Managing Director C J George said “I don’t think they (BNP Paribas) will exit. They want to remain. I am a buyer otherwise”.
BNP Paribas has 32.89 per cent of the shares of the company. At present price it is valued at Rs 275.31 crore.
Geojit BNP Paribas net profit down 16%
Meanwhile, consolidated revenue of Geojit BNP Paribas during the third quarter of 2015-16 decreased by 16 per cent to Rs 63.55 crore from Rs 76.01 crore during the same quarter of the previous fiscal.
While profit before tax (PBT) showed a 45 per cent decrease from Rs 25.89 crore to Rs 14.17 crore, compared to the same quarter of the previous fiscal, the company’s profit after tax (PAT) was down by 51 per cent from Rs 16.55 crore to Rs 8.17 crore compared to the same quarter of the previous fiscal.