India's only SEBI-approved and regulated Islamic investment company - Parsoli Corporation Ltd - has decided to encourage Muslim institutions and trusts to invest in commodities like gold and silver.
According to the Sharia law, Islamic institutions and trusts cannot invest in stock market. So the company has chalked out a plan to help the community to invest in commodities sector.
Keeping this in mind, the company is holding Islamic Investment and Awareness Conferences in Mumbai on March 10 and thereafter in Hyderabad, Bangalore and Delhi this year, its joint managing director Uves Sareshwala and chief financial officer Talha Sareshwala told Commodity Online.
Parsoli, a company listed in 1995 on BSE and then on NSE, has already applied for membership of Multi Commodity Exchange for trading and investments in commodities.
To focus on the new opportunities, the company's CEO and MD Zafar Sareshwala has also relocated recently from London to Mumbai. There are thousands of mosques and other Muslim institutions and trusts in India, which can safely make their investments as per the Sharia law through Parsoli.
The trading company, currently having three franchises and corporate office in Ahmedabad is all set to have 30 franchises across India by June this year, Sareshwala said.
The client-base of the company has increased from 750 to nearly 1,200 since December 2006 while about 10,000 to 15,000 viewers, mainly from West Asia, have hit its Web site from overseas.
Last year, Germany's Baader Bank took a 25 per cent stake in Parsoli, the Mumbai-based public limited company.
However, Sareshwala clarified that their company had little to do with Islam as a religion, and it was following only an ethical business model. Of the eight directors of the company, only three are Muslims. The non-Muslim directors include two Christians and three Hindus - Bollywood film personality Mahesh Bhatt being one of them.
Sareshwala said 80 per cent of Indian companies fulfilled Islamic criteria wherein the Muslims could invest their money. "Like the Jains, even we don't invest in things like abattoirs."
Since Islamic institutions and trusts cannot invest in stock market, Parsoli would advise them to invest in gold, silver and commodity markets.
He said: "We can give them the option of investing in gold. We would not go for futures and options nor for derivatives and focus on cash and delivery basis. There would be no liquidity problems either. It is a new, untapped market we are creating. Gold is as good as cash. Till now the Muslims had to give any interests accrued to, say, their safe deposits to charity. Now they can buy gold through the mutual fund route as their earnings would be price appreciation rather than interest."
The company earned a revenue of Rs 22 crore (Rs 220 million) in the first three quarters of 2006-07 with a net profit of Rs 4.48 crore (Rs 44.8 million).
