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Edelweiss Financial Services’ share price rose more than 3% at the start of trading after the company said Hong Kong-based private equity firm Pacific Alliance Group (PAG) would buy a 51% stake in his wealth management business for Rs 2,244 crore.
Edelweiss Financial Services stock rose 3.33% to Rs 86.50 from the previous close of Rs 83.85 on BSE. The stock has risen 2.69% in the past 2 days. Edelweiss Financial stock trades above 5-day, 20-day, 50-day, 100-day and 200-day moving averages. However, in one year the share has lost 29% and has fallen 23% since the start of this year.
In one month, the stock has climbed 13%. A total of 0.68 lakh of shares changed hands for a turnover of Rs 57.75 on BSE. The company’s market capitalization rose to Rs 7,817 crore. This is PAG’s first majority stake in India.
The transaction is expected to close within the next 4-6 months subject to regulatory approvals. The financial services company plans to list the spin-off and listing of Edelweiss Wealth Management after the transaction closes.
Edelweiss sells 51% of its wealth management subsidiary to Pacific Alliance Group
This is the largest capital increase for the Edelweiss Group to date, the company said.
Rashesh Shah, Chairman and CEO of Edelweiss Financial Services, said: “Our well-capitalized companies have excellent partners with impeccable credentials who will provide them with expertise, reach and scale. When growth resumes, our businesses will be uniquely positioned to be part of India’s growth story once again. In addition, over the past 24 months, we have successfully managed our liquidity, leverage and asset quality and we will do so comfortably throughout fiscal 21. â€
Meanwhile, the company reported a loss of Rs 245 crore in the first quarter of the current fiscal year against a loss of Rs 132 crore in the corresponding period of the previous fiscal year. Total income fell 25% to Rs 1,919 crore in the first quarter from Rs 2,581 crore in the corresponding period of the previous fiscal year.
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