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Edelweiss Group and PAG, on Tuesday, announced an investment of about ₹2,366 crore by PAG in Edelweiss Wealth Management (EWM).
“This partnership will result in unlocking long-term value for shareholders and accelerating business growth,” it said in a statement, adding that PAG has made an investment of about ₹2,366 crore in EWM, including primary and secondary investment.
“In addition, PAG is also acquiring the entire ownership of the prior investors in EWM, Kora Management and Sanaka Capital, taking its stake to about 61.5 per cent,” it said.
Edelweiss will continue to hold about 38.5 per cent stake in EWM as earlier envisaged, with the option to increase it further to up to about 44 per cent.
Demerger
PAG and Edelweiss will work together towards demerger and the eventual listing of the business.
“PAG’s primary capital infusion into the wealth business will further strengthen the equity base and provide growth capital,” the statement said, adding that it also provides the Edelweiss Group with with growth capital.
“The focus will be on strengthening the leadership position in businesses such as alternatives asset management and asset reconstruction while further enhancing the retail expansion through housing credit, SME credit, life and general insurance and mutual funds,” it further said.
In August 2020, PAG and Edelweiss had announced the strategic investment for a 51 per cent stake sale in EWM.
“Our focus will continue to be on enhancing the value of the franchise while simultaneously exploring avenues to unlock this value for the shareholders,” said Rashesh Shah, Chairman and CEO, Edelweiss Group.
Nikhil Srivastava, Partner and Managing Director, Head of India Private Equity, PAG, said: “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.”
EWM comprises wealth management and capital markets business. It reported revenue of ₹880 crore and net profit of ₹180 crore for the nine months of the current fiscal.
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