Indian operations canned as Alpari heads towards IPO

Alpari has exited the Indian market, closing its Mumbai office in the advent of its anticipated 2015 IPO, with former CEO Pramit Brahmbhatt moving to pastures new

Hot on the tails of the many large retail FX firms which engaged in a series of high-value mergers, acquisitions and initial public offerings (IPO) last year is Alpari, a firm whose corporate direction is taking a very interesting path.

Whilst the company itself prepares for a possible IPO in London next year, it is taking steps toward positioning its operations accordingly, including having ceased to provide monthly volume figures for its UK operations, it was also announced recently that Alpari has elected to close down its operations in India, with pre-IPO concerns being the main factor.

Alpari’s office was located in Mumbai, and had sixty employees, serving clients across the country as direct customers, as well as via branch offices in other Indian cities.

Setting up offices in emerging markets regions was de facto business practice for FX firms just a few years ago, however with such regulatory uncertainty, lack of quality infrastructure and the constant concern over fiscal security, entering markets such as India, Turkey and other Middle-Eastern regions which until recently were not synonymous with established financial markets economies could be a bugbear when positioning a firm for publicly available stock.

As far as corporate strategy is concerned, some astute decisions have been made under the steerage of former CEO Daniel Skowronski, who led the company from its origins in Russia to becoming one of the world’s best known retail FX firms today. Mr. Skowronski was at the helm when Alpari closed its Cyprus operations, just ahead of last year’s bank bail-in which required holders of accounts at Bank of Cyprus and Laiki Bank (Cyprus Popular Bank) to hand over up to 60% of their deposited capital to redress the insolvent condition of the island’s financial institutions.

“India is the latest office to have been closed by Alpari, however the firm has previously withdrawn local operations from the U.S. and Germany and, therefore, will not cater to Indian customers anymore” Pramit Brahmbhatt, the outgoing CEO of Alpari India, told Indian news source The Hindu.

Alpari’s existing operations in Russia and the Commonwealth of Independent States has been a very fruitful enterprise, and this year so far, despite political uncertainty in Ukraine, the company has produced very positive results each month during the first quarter of 2014, contrary to the downward direction experienced by many retail firms in other regions.

With a prominent office in London, Alpari is well positioned to compete with other publicly listed FX firms, and appears to concentrate on the Far Eastern client base, as well as Western Europe.

Mr. Brahmbhatt will conclude his term at Alpari India on March 31, 2014, and, thereafter, he will take charge of Veracity Group of companies as Group CEO. Veracity, based out of Ahemedabad, has interests in financial services, including equities, currencies, commodities and research and advisory services.

Despite European financial crises which have ranged from the 2008 credit crunch which saw a number of major banks bailed out by the International Monetary Fund and become nationalized, Greek bonds become toxic, and almost half of southern Europe’s youth population remain without employment, London has held its head up as the preferred region for which FX firms to float their stock, with highly efficient Plus500 having risen to fortune since its IPO, and payment processing firm SafeCharge recently having chosen London to make its entry as a publicly listed entity.

With this borne in mind, a clear pattern among retail FX contenders is that they favor the highly organized and established structure which London offers, continue to rely on the Far East for its robust and keen base of traders, and continue to eschew areas of uncertainty.

For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.

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