BNP Paribas, a prominent European banking entity, has finalized the sale of its Indian retail broking arm, Sharekhan, to Mirae Asset Financial Group from South Korea for a staggering ₹3,000 crore.
Sharekhan, a trailblazer in India's online broking domain, has cemented its status as one of the country's top 10 retail brokerage firms. The acquisition by Mirae Asset reflects the ongoing strategic maneuvers within the financial sector and the evolving landscape of retail broking services, reported Economic Times.
This divestment is part of BNP Paribas' larger strategy to steer away from retail business operations in India. The banking giant had initially acquired Sharekhan in 2015, finalizing the deal in January 2018, which attracted foreign investments totaling slightly over ₹2,000 crore. This move strategically positioned BNP Paribas within India's brokerage and financial services market.
BNP Paribas has been tactically redefining its focus by divesting from non-banking businesses. The decision to offload Sharekhan resonates with this strategic direction, emphasizing a concerted effort to concentrate primarily on its banking operations. This recent divestiture follows earlier exits from mutual fund and wealth management businesses, indicating a deliberate reorganization of resources and operations, reported Money Control.
Prior to acquiring Sharekhan, BNP Paribas had secured a 34% stake in Geojit Securities, based in Kochi, in 2007. In a subsequent transaction in 2018, BNP Paribas divested its 33% stake in Geojit Securities to Sharekhan.
Founded by Shripal Morakhia in 2000, Sharekhan has undergone multiple transitions in ownership over the years. In the fiscal year ending March 2023, despite boasting 6.3 lakh active clients, the brokerage firm reported a net profit of approximately ₹170.9 crore, marking a 25% decline compared to the previous fiscal year (FY22) when it recorded a net profit of ₹225.3 crore.
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