The Rs 280-crore Geojit BNP Paribas Financial Services is looking at acquisitions to strengthen its geographic base. In an interview with FE?s Debojyoti Ghosh, managing director, CJ George shares the company?s expansion plans in India and the West Asian market.

What are your expansion plans this fiscal?

We plan to expand the mutual fund (MF) advisory business this year. We also hope to hire close to 400 people in this line of business. We are getting requests from a lot of investors who have been abandoned by the independent financial advisors (IFAs) after the new commission structure was introduced by Sebi. We have taken a strategic decision to grow this business as a part of our long-term growth strategy, irrespective of the commission structure.

What kind of investment are you planning for the expansion?

For branch expansion, we have not committing huge capex and plan to invest only about Rs 5 crore. Of the 70 offices, that we plan to open in India, around 30 will be franchisees. Hence, the capital requirements will be relatively low. We have internal resources to fund these expansion projects since the amount involved is not huge.

What are your business plans from the recent tie-up with Saudi Arabia?s Al Johar group?

The Kingdom of Saudi Arabia (KSA) is a virgin market for India centric businesses. This country claims to have the largest number of NRIs, among all countries and our firm, Aloula Geojit Brokerage recently received permission to provide investment advisory services to NRIs.

Under this licence, we plan to expand our network of service points. Currently, we have three branches in KSA and depending on growth potential we shall look at more such offices. There are plans to deploy at least 20 investment advisors in the NRI department. These advisors will service the NRIs through the offices in Riyadh, Damam and Jeddah. Aloula Geojit will also examine the possibility of structuring an India-dedicated fund for wealthy Saudis to invest in India.

Are you targeting any other international foray?

Our natural market outside India is West Asia as it is home to the largest number of NRIs. Hence, we are consolidating our business in the UAE because, Geojit BNP Paribas through the joint venture Barjeel Geojit Securities is the only licensed Indian brokerage firm in the retail space. We have four offices in the UAE ? Dubai, Abu Dhabi, Sharjah and Ras Al khaimah.

We are applying for licence to open two more branches in the UAE. Aloula Geojit Brokerage Company has plans to open an office in Jeddah. We are also increasing the number of advisors in Bahrain and Kuwait who are servicing NRIs through an agreement with Bank of Bahrain and Kuwait. We also have plans to start a JV in Oman for brokerage business.

In the last few quarters, the financial brokerage business had taken a hit due to volatile markets. How did this impact Geojit BNP Paribas?

During the first quarter of the current year, our consolidated top line has dipped 16% to Rs 64.4 crore from Rs 76.6 in the corresponding quarter of last year. Consolidated profit after tax was down by 53 % to 6.18 crore.

During the first quarter, we had to face a loss of close to Rs 4 crore from our the JV?s operations in the institutional brokerage and the Saudi joint venture, which is understandable, as these are relatively new entities. But our customer assets under management have crossed Rs 10,000 crore this quarter and the number of customers has crossed the Rs 5 lakh mark.