BNP Paribas to invest €70 mn in `Sharekhan by BNP Paribas'
06 January 2017
French bank BNP Paribas on Thursday said it will invest €70 million in retail brokerage Sharekhan by 2020, having acquired it in November. The combined entity has been rechristened 'Sharekhan by BNP Paribas'.
The bank will also continue holding its 33.4 per cent stake in rival retail broker Geojit Financial Services, though it is no longer a promoter in the firm.
The present arrangement does not invite questions of a conflict of interest said Joris Dierckx, chief executive and country head, BNP Paribas India. ''The view of BNP Paribas is that there is no conflict of interest between our stake in Geojit and the shareholding in Sharekhan.''
Two nominees of BNP had resigned from Geojit in November last year to avoid a situation where the company is on the board of two competing firms.
BNP Paribas had acquired Sharekhan in November last year for Rs2,000 crore while its stake in Geojit is around Rs287crore. Dierckx said that to address any potential concerns, BNP had made a few decisions - ''We have taken a step back from the arrangement that we had with Geojit and we have withdrawn from certain negotiations ... we have reorganised the arrangements.''
Up to €20 million of the total investment would be put into the digital business over a period of five years, said Jaideep Arora, chief executive of Sharekhan. There would be more focus on mobile broking, he said.
"Our priority in terms of product development, roadmap is going to be mobile first. We get 10-12 per cent (business) through mobile. This is going to be much more significant. India is already the second largest smartphone market with 220 million smart phones in 2015, likely to go to go to 530 million,'' he said.
The main objective of the acquisition is for the retail broking firm to become the second largest one in the country by 2020, said Thierry Laborde, deputy chief executive and head of domestic markets, BNP Paribas.