Edelweiss shares crack 12% on stake sale buzz

Shares of Edelweiss Financial Services cracked as much as 12 per cent in Wednesday's session after reports that the company is looking to sell 20 per cent of its wealth business.

ET reported that US-based Kora Management is in advanced talks to buy 20 per cent in Edelweiss Wealth Management for Rs 2,000 crore, valuing the company at Rs 10,000 crore.

Edelweiss Wealth Management provides advisory distribution, broking and asset services, ESOP & margin funding.


It plans to focus on scaling its wealth management services in 2020, especially for the affluent business, as in the credit business it is looking to conserve liquidity and maintain asset quality over book growth.

It advises assets of over Rs 1 lakh crore and has a client base of over 4.8 lakh.

Edelweiss group, with businesses from wholesale financing to debt restructuring to asset management, has debt obligations, including principal and interest of Rs 6,500 crore from May 29, 2019, till September 30, 2019, against which the total expected inflows, including asset EMIs and repayments, are Rs 3,600 crore.

Also, it has a liquidity cushion of Rs 5,300 crore, including undrawn bank lines of Rs 1,300 crore.

The scrip closed 7.21 per cent down at Rs 161.55 on BSE.