Edelweiss Financial Services on Thursday said that its board has approved sale of 51 per cent stake in its wealth management business to Pacific Alliance Group (PAG) for an investment of $300 million (approximately Rs 2,200 crore). The deal will be completed at a post-money valuation of Rs 4,400 crore. This will be PAG's first majority equity investment in India. The transaction is expected to close in the next 4 to 6 months, subject to regulatory approvals, Edelweiss Financial Services said in an exchange filing.
Edelweiss Wealth Management (EWM) will be demerged and listed thereafter in due course, the company also said. This is the largest equity raise by Edelweiss Group so far that has been created in the wealth management business.
"The PAG transaction will give them (EWM) a great partner, which will provide them the impetus to expand scope even further. We have started putting in place a path that will see EWM demerged and listed in due course. We are also guided by the Board to seek investment partners in Edelweiss Asset Management (EAM) and GI businesses, and EAM will also be demerged and listed thereafter.The capital surplus that we will generate will help us continue the virtuous cycle of creating and unlocking value that we have followed consistently over the past 25 years," said Rashesh Shah, Chairman and CEO, Edelweiss Financial Services Limited.
Edelweiss Group's structure is organised under six business segments - Corporate Credit, Retail Credit, Wealth Management, Asset Management, Life Insurance and General Insurance, with legal entities aligned to these six business segments.