Brokers plan Shari'ah funds

A slew of Indian brokerages including Mangal Keshav and Parsoli Corporation, which have recently sold equity to Gulf-based investors, are raising money through Shari'ah funds for investments in Indian stock markets.

The Indian markets will witness a strong flow of petro-dollars in 2008, following up on the stake buys by several Gulf-based financial institutions this year.

Several brokerage houses including Mangal Keshav group, Almondz Securities, Parsoli Corporation and Select Securities have attracted interest from the Gulf investors.

The Oman-based private equity company Al Anwar Holdings acquired a 14.99 per cent stake in Almondz Global Securities. Oman's largest bank, BankMuscat picked up a 43 per cent stake in the Mangal Keshav group.

Parsoli Corporation has already announced a $20 million Islamic-India fund in partnership with Germany's Baader Bank, which has 30 per cent stake in the brokerage house.

The fund is open-ended and registered as a sub-account with Baader Bank's subsidiary, which is a Sebi-registered foreign institutional investor. The fund has received commitments from European investors.

Incidentally, the Oman-based investment company, Gulf Investment Services has a 20 per cent stake in Parsoli Corporation. Doha Bank, which bought 49 per cent equity stake in Kochi-based Select Securities, may also be exploring an India-specific Shariah fund, according to sources. But, this could not be confirmed.

"The potential in the Gulf countries is tremendous. Hardly any money has come into India till now. This, coupled with the fact that there are more Shari'ah compliant companies in India compared with Pakistan, Bangladesh, Indonesia and Malaysia, makes India an attractive destination," said Zafar Sareshwala, chief executive officer, Parsoli Corporation.

"We may collaborate with Gulf Investments to mobilise money for other funds targeted at investors in the Gulf region," he added.

BankMuscat also has plans to raise a $ 250 million Shari'ah-compliant India-specific fund. An executive from BankMuscat had said that the money would be raised primarily from Oman and Dubai.

"Having started operations in Saudi Arabia, we will also look at the possibility of raising money from this market," he said. The new fund would be managed by Mangal Keshav.

Almondz Securities, however, ruled out any plans of starting a Shari'ah fund. "The capital infusion will help us to aggressively expand our retail business. We see a strategic business fit between Al Anwar Holdings and Almondz," Vinay Mehta, MD and CEO, Almondz Global Securities said.

ACROSS THE GULF

Several brokerage houses including Mangal Keshav group, Almondz Securities, Parsoli Corporation and Select Securities have attracted interest from the Gulf investors