The Hindu Business Line : Geojit spreads wings with Saudi jt venture

Brokerage venture
The company will commence operations with a capital base of 100 million Rial (Rs 120 crore) and accretions to the capital will be made in a phased manner.
Along with the normal broking services, the company will also offer Internet trading and custody services

MR C.J. GEORGE, Managing Director

Kochi , May 13

With the opening of the Rs 480-crore (400 million Rial) joint venture company in Saudi Arabia, Geojit Financial Services Ltd is poised to become the first Indian stock broking company to enter into a foreign country and commence capital market operations for foreign nationals.

"Taduwal, the Saudi Stock Market, has become the world's third largest equity market with a daily turnover exceeding $10 billion. Of the 2.7 crore population with an average per capita income of $12,900, over 60 per cent are active in capital market operations," Mr C.J. George, Managing Director, Geojit Financial Services, said.

Geojit, along with the Al Johar Group of Saudi Arabia, and business houses from Oman, the UAE and Bahrain, is setting up the brokerage company, utilising its vast experience, expertise and technology in this field. The company has targeted 10 per cent of the market share with 15 branches, scheduled to open in the next couple of years.

Till recently, only Saudi-based banks were permitted to undertake stock market operations, which has now been thrown open to others as well. "The joint venture will not only be the first company from India, but possibly the first company after banks, to commence stock market operations in Saudi Arabia," Mr George said.

International partner

The joint venture came into fruition when the Al Johar Group approached the consulting firm, Deloitte, seeking an international partner with proven track record, expertise and technology to commence stock broking operations in Saudi Arabia. After an international search, Deloitte narrowed the choice to the Kochi-based company and Geojit entered into an equity and management contract to commence and operate the company.

Geojit will be appointing a Managing Director, who will be reporting to the board of the new company. It will also appoint a CEO, who will be Saudi national, well versed in capital market operations.

Membership

The joint venture company has taken membership with Saudi exchange at a cost of 50 million Rial (Rs 60 crore). The company will commence operations with a capital base of 100 million Rial (Rs 120 crore) and accretions to the capital will be made in a phased manner.

Geojit will hold 30 per cent of the equity, Al Johar group another 30 per cent and the remaining with other partners of the joint venture company.

The 1.5 million Indian expatriates working in Saudi would boost business volumes of Geojit.

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