Edelweiss Financial Services share after the company decided to get rid of its 70 percent stake in the insurance brokerage joint venture. Edelweiss Financial action opened with a gain of 2.5% to Rs 73.90 on BSE. The action hit an intraday high of Rs 75.4, up 4.58% on BSE.
Edelweiss Financial stock trades above 5-day, 20-day, 50-day, 100-day and 200-day moving averages.
The stock has gained 22.54% in one year and is up 8.24% since the start of this year.
In one month, the stock has climbed 15.13%.
The company’s market capitalization reached Rs 6,949 crore.
The stock later ended up 2.91% to Rs 74.20 against the previous close of Rs 72.10 on BSE.
A total of 3.53 lakh shares changed hands for a turnover of Rs 2.62 crore.
The financial services firm said it would withdraw from the insurance brokerage business by selling its 70% stake in Edelweiss Gallagher Insurance Brokers for Rs 307.60 crore.
“The company has entered into an agreement … to sell its entire stake (currently 70%) in Edelweiss Gallagher Insurance Brokers Ltd, a subsidiary specializing in insurance brokerage to Arthur J Gallagher & Co …”, said Edelweiss Financial Services.
Gallagher, who previously owned 30 percent of the company, will now acquire all of the remaining shares, increasing its stake to 100 percent.
The company said, in accordance with the agreement, that 37,000,000 shares of Rs 10 each representing 70% of the paid-up share capital of Edelweiss Gallagher Insurance Brokers held by the company will be sold for a consideration of Rs 307.60 crore, in one or more installments, as indicated in the agreement.
Rashesh Shah, chairman of Edelweiss Group, said the sale will provide the company with “the flexibility to reallocate capital and invest in the development of our rapidly growing life and non-life insurance business, which will make it a win-win for both of us ”.
The transaction is subject to receipt of regulatory and other appropriate approvals (including approval from the Indian Insurance Regulatory and Development Authority) and fulfillment of the obligations / conditions prescribed in the agreement.