Edelweiss Group is an investment and
financial services company based in Mumbai,
India. It is not backed by a large
conglomerate co-founded by RASHESH
Shah.
● INTRODUCTION
Edelweiss Group (officially known as Edelweiss
Financial Services Limited) is an investment and
financial services company based in Mumbai, India. It
is not backed by a major conglomerate co-founded by
RASHESH SHAH.
The company operates in a variety of financial services
ranging from brokerage services to life and non-life
insurance, private equity and other investment-related
services through subsidiaries. It has a network of sub
brokers and authorized persons across India. It is
registered with the National Stock Exchange of India,
the Bombay Stock Exchange and the MCX Stock
Exchange. Initially, the company worked on private
equity syndication, mergers, acquisitions (M&A) and
focused on advisory services. In 2000, the company
had a capital of 50 million rupees. It acquired
ROOSHNIL Securities in 2017.
1996-2004
EDELWEISS EMBEDDED ITSELF AS A MERCHANT BANK IN 2000.
IT ALSO GAVE ASSISTANCE TO STARTUPS RAISE FUND THROUGH
IPO ROUTE VENTURE CAPITAL & PRIVATE EQUITY FUNDS.
2004-2012
During this period, Edelweiss added the Institutional Brokerage and
Non-Bank Financial Company (NBFC) activity to its portfolio. In 2007
Edelweiss obtained his Clearing Member license. The same year
Edelweiss entered management assets with the launch of real estate
funds.
In 2007, Edelweiss Global Wealth Management was founded to provide
solutions for wealth structuring, asset protection, asset transfer
strategies, risk management and investment banking.
In 2008, the EdelGive Foundation (the charitable wing of the company)
was established with education and livelihoods as its main objective.
In 2010, Edelweiss acquired Anagram Capital, for Rs. 164 crores. In
2011, Edelweiss TOKIO Life Insurance was created as a joint venture
between Edelweiss and the Japanese insurer TOKIO Marine. Edelweiss
held a 74 percent stake in the joint venture.
CURRENT SCENARION
In 2014, Edelweiss Financial Services acquired Mumbai-based
asset management company, Forefront Capital Management.
In 2016, Edelweiss Asset Management Company completed the
acquisition of fund schemes of JP Morgan Asset Management
India.
In September 2016, Edelweiss Financial Services Ltd also agreed
to acquire Ambit Investment Advisors' longshot hedge fund Ambit
Alpha Fund.
In 2016, Caisse de dépôt et placement du Québec (CDPQ), a
pension fund manager in North America, acquired 20 per cent
equity stake in Edelweiss Asset Reconstruction Company (EARC)
with a view to investing annually in stressed assets and the
specialized corporate credit segment, over a four-year period.
(THIS PART IS BEING INTENTIONALLY LEFT BLANK)
ANALYSIS
●
ARTICLE 1
EDELWEISS’ shares decline on report of irregularities.
Shares of Edelweiss Financial Services Ltd fell 5% after a report
that the Department of Commerce (MCA) began investigating
allegations of financial irregularities in the conglomerate's asset
reconstruction division.
According to online news site Money control, the MCA has
ordered an inspection of the company's books following a
shareholder complaint to the PM Office (PMO) and the Reserve
Bank of India (RBI).
Former Additional Solicitor General of India Paras KUHAD
alleged that Edelweiss Group, the majority shareholder of
Edelweiss Asset Reconstruction Co (EARC), together with its
Canadian partner, CAISSE de Dépôt et placement du Québec
(CDPQ ), will hold at least 1,800 crores in EARC.
kuhad and his family own about 14% of EARC, which manages
45,000 crore in assets, according to the report.
● ARTICLE 2(ANALYSIS)
SEBI IMPOSES Rs 5 LAKH ON EFSL’S COMPLIANCE
OFFICER
Compliance officer & CS BRENGANATHAN of edelweiss financial
services limited was imposed with Rs. 5 lakhs by the market regulator
SEBI for failing to close the trading window during the existence of the
unpublished price-sensitive information.
SEBI conducted enquiry in the dealing of the script of edelweiss
financial services limited, to check the possible violation of PIT
(prohibition of insiders trading) regulations for the period between
January 2017 to April 2017.
According to Sebi, RENGANATHAN, being the compliance officer of the
company, failed to close the trading window during the period of January 25, 2017
to April 5, 2017.
By his failure to close the trading window during this period, he has violated the
provisions of minimum standards for code of conduct to regulate, monitor and
report trading by insiders mentioned in the PIT regulations, the regulator added.
Further, he has admittedly begun intimating stock exchanges on trading window
closure only from January 2019.
Accordingly, the regulator levied the penalty of Rs 5 lakh on him.
● ARTICLE 3(ANALYSIS)
Edelweiss expects Tech Mahindra to deliver 13% revenue
CAGR (compound annual growth rate) over FY21-23E.
Tech Mahindra (TECHM), part of the Mahindra Group, is one of the top
five IT services companies in India. Edelweiss expects Tech Mahindra
to generate a 13% CAGR on fiscal 21-23E. An improved cost
management execution engine, targeting large transactions, talent
management and cash conversion, is expected to improve margins and
further reduce financial costs, resulting in a CAGR PAT of 17% over the
same period.
Strong demand driven by digitalization is expected to support strong
growth in the Enterprise (ES) segment of the company, the brokerage
firm said in a note. As the communications segment (CS) has lagged, the
momentum for 5G deals is accelerating. This should allow for a faster
resumption of growth in CS.
● ARTICLE 4(ANALYSIS)
EFSL’S ANNOUNCEMENT OF ALLOTING OF ESOP/ESPS.
EFSL’S share allotment committee held a meeting and decided to
allocate equity shares of 7,57,025 at face value of Rs 1, each under
edelweiss employee stock incentive plan (ESIP) of the company.
As it being a very impressive move by edelweiss financial ltd. To allot
ESIP to its employee’s , it will surely make ESF ltd. a good employee
satisfaction company the latter meeting was held on 16th of September
2021 which was further signed by TARUN KHURAN as him being the
company secretary of the ESFL the last verification was to be carried by
Khurana and the latter did the same.
A SENSE OF OWNERSHIP
As the EFSL allots ESOP/ESIPs to its employees they feel a sense of
ownership which will motivate and eventually will boost the
productivity of employee’s also they will develop an urge to do a mile
more , perform better and add more trust among employees.
● ARTICLE 5(ANALYSIS)
EDELWEISS FINANCIAL RAISES Rs 400 CRORE THROUGH
NCD’s.
EFSL raised a hefty amount of rupees 400 crore through NONCONVERTIBLE DEBENTURES , the 50% of total issue size got subscribed
for 5 year & 10 year tenures,
EFSL’s chairman & managing director RASHESH SHAH said in the
release that “the issue has been oversubscribed which shows the faith
of investors across categories have in our diversified model and
appetite of high quality financial papers that offers competitive interest
rates.
The NCD issue has seen interest from investors across series and tenures
offering annual, monthly, and cumulative interest options with the
effective annual yield ranging from 9.09 per cent to 9.70 per cent, the
release.
The NCDs have been rated ACUITE AA (read as ACUITE double A) (Outlook:
Negative) by ACUITE Ratings and Research and [ICRA]A+ (Negative) by ICRA
Limited".
EFSL ONCE AGAIN PROVED THE FAITH OF INVESTORS ACROSS CATEGORIES
TOWARDS THE CORPORATE AS THE COMPANY WAS ABLE TO RAISE 400CRS
● ARTICLE 6(ANALYSIS)
EDELWEISS FINANCIAL SERVIES TO SELL ITS 70% STAKE
IN INSURANCE BROKING JV.
The edelweiss financial recently spoke about its insurance broking business the
latter said that it would sell its 70% stake to edelweiss Gallagher insurance brokers
ltd. For 307.6 crores
Gallagher which previously acquired 30% of the business shares now will be
acquiring all the remaining shares by complete filling of all 100% shares.
The company said, as per the agreement 37,00,000 equity shares of Rs 10 each
representing 70 per cent of the paid-up share capital of Edelweiss Gallagher
Insurance Brokers held by the company to be sold for a consideration of Rs 307.60
crore, in one or more tranches, in the manner as set out in the agreement.
In addition to the sale consideration, Edelweiss Financial Services will also be
entitled to receive a deferred contingent consideration based on the future revenue
of Edelweiss Gallagher Insurance Broker, in the manner set out in the agreement.
EFSL’S MANAGING DIRECTOR & CHAIRMAN RASHESH SHAH SAID THE
SALE WILL PROVIDE “FLEXIBILITY TO REALLOCATE CAPITAL AND
INVEST IN SCALING UP OF OUR FAST- GROWING LIFE & NON-LIFE
INSURANCE BUSINESS MAKING A WIN FOR BOTH OF US.
● ARTICLE 7(ANALYSIS)
ACUITE RATINGS REAFFIRMS CREDIT RATING OF EFSL; STOCK
ENDS 1% HIGHER.
Company’s long term borrowing program of 1900 cr. Was affirmed negative by
the credit rating agency ACUITE AA,
Recently CRISIL had assigned CRISIL PPMLD AA-r/negative rating on the
company’s Rs. 300crores long-term principal – protected market linked debentures
.
THE EFSL landed at Rs. 80.35 per piece up by Rs 0.8 or 1.01% from its previous
closing of Rs 79.55 per piece on the BSE.
The scrip being opened at Rs 80.25 and engaged with a high and low of Rs81.50
and Rs.79.50 respectively.
● ARTICLE 8 (analysis)
EDELWEISS FINANCIAL Q1 NET PROFIT TURNS
AROUND TO RS18.1 CR ON LOWER FINANCE COSTS
AND LOWER IMPAIRMENT.
EFS Ltd announced a -13.96% drop in total revenue for the June 21
quarter on a consolidated basis to Rs1,633.21cr. On a sequential basis,
revenue decreased by -46.59% compared to revenue of Rs 3,057.88cr in
the March 21 quarter, reflecting a sharp decline in net gains on changes
in fair value.
The interest income was sharply lower by over 25% on yoy basis due to
a fall in interest rates in the economy leading to lower loan yields.
However, insurance premium income was sharply higher but lower on
sequential basis due to COVID 2.0.
The net profit ascertained for the June-21 quarter turned around to profit
of Rs 18.09 crore against the net loss of Rs 245 crore in the June 20
quarter due to corona virus strain. During the current fiscal, it will
complete the demerger of edelweiss wealth. The mutual funds aum
witnessed the tremendous growth of 111% to Rs 62,000 crore.
● ARTICLE 9 (ANALYSIS)
EDELWEISS FINANCIAL SERVICES SHARE FALLS
5% FOR SECOND SESSION AFTER MCA ORDERS
INSPECTION OF SUBSIDIARY’S BOOKS.
The ministry of corporate affairs led to a fall of edelweiss financial share
of 4.99% to making it Rs 76.15 when compared previously which was of
Rs 80.15 0n BOMBAY STOCK EXCH.
EFSL’S shares tumbled 5% for the second consecutive session in early
trade amid reports that the corporate affairs ministry did ordered a
through inspection of books of its firm ARConst. after a following
allegation of funds been misused by a whistle blower. Whereas
EDELWEISS ASSETS RECONSTRUCTION completely denied this
intimacy & further added that the business operations have been fairly
conducted and in a very transparent manner.
It drowned from previous close of Rs 80.15 to 76.15 resulting in a fall
percentage of 4.99% on BOMBAY STOCK EXCHANGE.
EFSL’S stock swims higher than 20day,50day, 100 day and 200 day
moving averages but lower than 5 Day moving averages.
● ARTICLE-10 (ANALYSIS)
EDELWEISS FINANCIAL SERVICES REPORTS Rs 63
CRORE LOSS IN THIRD QUARTER.
The EFSL recently opened up about its consolidated loss of Rs 63 crore for the
third quarter ended in 2020.
Subsequently it registered a opposite net profit of Rs 35.32 crore in the same
quarter last year, the loss widened from Rs 56.12 crore in quarter ended September
2020.
The company revealed its fee income during the quarter at Rs 477 crore was back
to the pre covid level and there is a strong control across wealth management, asset
management and assets reconstruction company.
The customer assets rose by 17 percent from a year ago relatively which was at Rs
2.65 lakh crore.
There were subsequent tremendous & robust recoveries in asset reconstruction of
Rs 2,200 crore in Q3FY21, even with IBC suspension, it said.
The Edelweiss group engages and operates in a total of 10 entities across NBFC’S,
housing finance, life insurance, assets management, assets reconstruction, general
insurance, insurance broking & wealth management.
“As the Indian economy enters a phase of strong and firm economic growth, it
brings thrilling and exciting opportunities for growth for each of our business.
BIBLIOGRAPHY
● https://www.edelweissfin.com/
● https://economictimes.indiatimes.com/
● https://www.livemint.com/market/market-stats/company-bse-edelweissfinancial-services-ltd-132922.