Edelweiss Financial Services Jumps 3% Before Paring Gains On PAG Deal

On Friday, shares of Edelweiss Financial Services rose 3 percent before paring gains after PAG agreed to buy controlling in its wealth management and capital markets business.

PAG, among the largest Asia-focussed alternative asset management firm, on Thursday, said that it is paying Rs 2,244 crore to buy a 51 percent stake in the wealth management and capital markets business of Edelweiss Financial Services, which also includes investment banking.

These businesses that will be carved out of Edelweiss subsidiary, called Edelweiss Global Investment Advisors.

These businesses come under the umbrella of Edelweiss Global Wealth Management Limited (EGWML). Edelweiss will issue compulsorily convertible debentures (CCDs) to PAG worth Rs 2,204 crore. There will also be a primary issuance of securities by Edelweiss' securities business of around Rs 140 crore to EGWML and PAG along with the other existing shareholders.

On Thursday, the company's board approved the sale at the board meeting, wherein, parent Edelweiss will retain around 37 percent stake in the entity while existing investors Sanaka Capital and US-based Kora Management will own a total of 12 percent.