Edelweiss Financial Services Limited raises Rs. 1,527.75 crore through QIPO route

Edelweiss Financial Services Limited (EFSL) has, on Thursday, November 23, 2017, raised Rs 1,527.75 crore through the Qualified Institutions Placement (QIP) route. The QIP opened on November 15, 2017 and closed on November 20, 2017. This is the first equity fund raise by EFSL since its IPO in December, 2007.

EFSL allotted 54,562,488 equity shares of face value of Rs 1 each (Equity Shares) to eligible qualified institutional buyers (QIBs) at Rs 280.00 per Equity Share, a discount of 1.80 percent or Rs 5.14, to the QIP floor price of Rs 285.14 per Equity Share, in accordance with the pricing formula provided under Regulation 85(1) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

Speaking on the occasion, Rashesh Shah, Chairman, Managing Director and CEO of EFSL said, "We are delighted with the way that our fund raise has been received by marquee investors like CDPQ, Fidelity, Goldman Sachs, Nomura, HDFC Mutual Fund, Kotak and Birla MFs. We see this as an endorsement of our business model that uses both capital and talent vectors in growing surely and steadily. Investors in Edelweiss gain exposure to a diversified breadth of businesses serving both retail and corporate customers that ranges from retail and corporate credit, wealth management, asset management, capital markets to insurance.

We strongly believe that the long term trends in the democratisation of access to credit and continued financalisation of savings are irreversible. This fund raise makes us very well positioned to benefit substantially and sustainably from these two trends".

The QIP saw subscription from foreign as well as domestic QIBs. In particular, Caisse de Dépôt et Placement du Québec (CDPQ), the second-largest pension fund in Canada has used the opportunity to get a stake in EFSL. It may be recalled that, CDPQ signed an agreement with EFSL to invest Rs 5,000 crore in stressed assets and specialised corporate credit in India, over the next four years. CDPQ also acquired a 20 per cent equity stake in Edelweiss Asset Reconstruction Co, India’s largest ARC.

Other marquee investors in the QIP included HDFC Mutual Fund, Kotak Mutual Fund and Birla Mutual Fund as well as existing shareholders like Goldman Sachs, Nomura, Fidelity, Steadview, GSAM, Halbis, GMO, DE Shaw, Amansa William Blair etc.

Since 2012, over the past 26 quarters, Edelweiss Financial Services has grown at a CAGR of 37%. During this same period, the balance sheet has grown at a CAGR of 26%, which highlights the non-linear profitability potential of our unique business model. The retail credit book has grown at a CAGR of 45% consisting principally of small ticket home loans and SME loans. As of September 30, 2017, the total Credit book was at INR 32,540 cr of which 36% is in retail, 47% in Corporate, and 17% in the Distressed Credit business.

The funds raised through the QIP would be utilised by EFSL for various purposes, including but not limited to, augment its long term resources, to fund growth and expansion, maintain capital adequacy, consolidation of its subsidiaries, general corporate purposes, etc., as per EFSL’s growth and business related plans from time to time.

Shares of Edelweiss Financial Services Ltd. was last trading in BSE at Rs.285.2 as compared to the previous close of Rs. 289.95. The total number of shares traded during the day was 337807 in over 4003 trades.

The stock hit an intraday high of Rs. 291.75 and intraday low of 281.4. The net turnover during the day was Rs. 96491677.

Source : Equity Bulls

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