Mumbai, Jan 25 Diversified financial services player Geojit Financial Services, which today reported a 39 per cent growth in net income at Rs 21 crore for the three months to December, said it will reenter the commodities derivatives brokerage business soon.
Consolidated revenue rose 33 per cent to Rs 101 crore for the reporting period, while its assets under custody and management rose to Rs 41,118 crore, thanks to a massive 91 per cent growth in its MF distribution income.
Managing director CJ George said the company will be entering the commodity brokerage business soon.
"To jump-start the commodity derivative business, the board has approved an agreement with Geofin Comtrade (a group company) to acquire its client base without any other assets or liabilities, on an arm's length basis for a consideration of Rs 8.1 crore," he said.
Geofin Comtrade has over 40,000 registered clients," he added.
George further said the Kochi-based group has already received trading-cum-clearing membership from MCX for commodities derivatives broking, and is in the final stages of getting approvals from NCDEX and NMCE.
"The agreement will enable us to add another promising business line while leveraging our existing business infrastructure and be EPS-accretive for the company from the first year itself," he added.
Geojit was previously engaged in commodity derivatives broking through a wholly-owned subsidiary Geojit Commodities. The business was discontinued in 2008 when BNP Paribas invested in it as banking companies were not permitted to undertake commodity broking under then RBI directions.
However, recently, the RBI amended the master directions allowing banks to undertake commodity derivative business through a subsidiary.
Sebi also now permits composite membership scheme which enables a company to engage in commodities derivative broking business.
Geojit Financial Services has over 9,13,000 clients, a network of 512 offices and has assets under custody and management of over Rs 41,118 crore.
The group has BNP Paribas, the Kerala State Industrial Development Corporation and big bull Rakesh Jhunjhunwala as leading shareholders after the group founder CJ George.
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