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BNP to expand India footprint

March 14, 2007 09:33 IST

French banking major BNP Paribas SA, which has separate joint ventures in retail broking, life insurance and mutual funds in India, is looking to expand its business in the country through equity partnerships with a domestic housing finance company and a non-banking finance company.

"We want to enter the asset finance and housing finance business in India. We are in talks with companies for equity partnership," said Frederic Amoudru, chief executive and country manager of BNP Paribas.  However, he declined to divulge the names of the companies.

Indian NBFCs have seen several foreign majors buying stake in the last couple of years. Some of the deals include US-based AIG buying 75 per cent stake in Chennai-based Vivek Hire Purchase and Leasing Ltd, D B Zwim buying 35 per cent stake in Dundapani Finance, Temasek arm Asia Financial Holdings taking majority control of Dove Finance, Singapore's DBS Bank acquiring 37.50 per cent stake in Cholamandalam Investment Finance Company and a group of funds led by Chryscap, Citigroup and FMO had picked up stakes in half a dozen NBFCs run by Shriram Group.

BNP Paribas has 49.9 per cent stake in Sundaram Asset Management Company and 26 per cent stake through group company Cardiff in SBI Life.

"In our asset management services, our priorities and challenges for 2007 is to accelerate growth in emerging countries like Asia, "said Olivier Le Grand, Head of BNP Paribas Personal Investors, BNP Paribas.

BNP Paribas will launch its offer to buy 20 per cent stake in Geojit in four days. The French financial major bought 34.35 per cent stake in Geojit Financial Services for Rs 207 crore (Rs 2.07 billion), in a deal announced late last year.

The Securities and Exchange Board of India rules requires BNP Paribas to come out with an open offer for 20 per cent stake from the public at a minimum of Rs 26 per share, the price at which it bought the stake from Geojit founder C J George (25.35 per cent) and another stake holder Kerala State Industrial Development Corporation (9 per cent).

Shares of Geojit Financial Services ended higher by over 6 per cent on Tuesday to close at Rs 38.85.

On future plans in brokerage business, Le Grand said the company will help Geojit Financial Services to cater to foreign and domestic institutional clients.  He, however, said BNP Paribas was not looking at joint ventures for its corporate advisory business.

"We plan to grow organically in our corporate banking business. With this strategic cross-continent partnership, we will capitalise on Geojit-BNP Paribas strong experience and brokerage asset gathering to accelerate development and generate synergies in fast growing markets."

C J George, managing director, Geojit Financial Services, said the company, which till now was catering to retail broking business, intended to leverage BNP's expertise in catering to the institutional business.

Three BNP Paribas nominees - Amoudru, Le Grand and Tierre Rousseau, head of BNP Paribas Securities, Asia, will join the board of Geojit Financial's board, George said. The name of the company will also change to Geojit BNP Paribas Financial Services Ltd.
BS Reporters in Mumbai