Edelweiss Financial Services has announced an investment by PAG’s private equity strategy in Edelweiss Wealth Management (EWM). This partnership will result in unlocking long-term value for shareholders and accelerating business growth.
PAG has invested about Rs2,366cr in EWM including the primary and secondary segment.
Additionally, PAG is also acquiring the entire ownership of the prior investors in EWM, Kora Management (Kora) and Sanaka Capital (Sanaka), taking its stake to ~61.5%.
Notably, Edelweiss will continue to hold ~38.5% stake in EWM as earlier envisaged, with the option to increase it further to up to ~44%.
Rashesh Shah, Chairman & CEO, Edelweiss Group said, “The partnership with PAG is a strong endorsement of the quality of businesses we have built to scale over the years. Our focus will continue to be on enhancing the value of the franchise while simultaneously exploring avenues to unlock this value for the shareholders."
Nikhil Srivastava, Partner and Managing Director, Head of India Private Equity, PAG said, “EWM is one of India's leading wealth management companies with products and services that are highly regarded by customers. We look forward to leveraging PAG’s global experience to drive innovation and transformation to further strengthen EWM's market position and create long-term value for all stakeholders.”
Edelweiss Financial said that PAG’s primary capital infusion into the wealth business will further strengthen the equity base and provide growth capital. PAG and Edelweiss will work together towards demerger and the eventual listing of the business, paving way for unlocking value.
EWM, which reported Revenues of INR 880 crores and Profit after Tax of INR 180 crores for 9MFY21, comprises the wealth management and capital markets business. It is one of India’s largest wealth management platforms, servicing over 2,400 of India’s wealthiest families as well as ~670,000 affluent and high net-worth individuals. It has consistently outpaced the market while making rapid strides in industry rankings as is evident in the customer assets under the advice that now amounts to INR 1.45 trillion, growing with a 43% CAGR from just INR 185 billion around 6 years ago in 2015. The capital markets and advisory practice has led marquee transactions over the years.
On Sensex, Edelweiss Financial was trading at Rs83.40 per piece up by 2.7% at around 2.31 pm.
Edelweiss Financial stock has jumped to an intraday high of Rs85.25 per piece in early deals of Sensex.