Diversified financial services conglomerate Edelweiss Group said on August 14 that US-based Kora Management will invest up to around $125 million (about Rs 875 crore) in the group.
Kora Management, an existing long-term investor in Edelweiss, has committed to invest $75 million (around Rs 525 crore) in the advisory business, Edelweiss Global Investment Advisors (EGIA), it added.
The proposed investment is subject to structuring-related milestones and customary regulatory approvals.
Kora is an investment company focused on the financial and technology sectors across emerging markets.
The company said that in addition to this investment, Kora plans to put in a further $50 million (around Rs 350 crore) in Edelweiss, the timing and structuring of which are being finalised.
The Edelweiss Group is also in talks with investors to join this first external investment round in EGIA, which will be limited to a total of $200 million (around Rs 1,400 crore), it added.
“Along with the June quarter earnings, the board also approved entering into a shareholders/securities subscription agreement amongst the company, Edelweiss Securities Limited (ESL) (a wholly-owned subsidiary of the company) and Kora Master Fund LP in connection with the proposed investment by Kora in ESL/ Edelweiss Group (Global Investment Business) in the form of compulsorily convertible preference shares (CCPs)/ equity shares or other convertible securities, in one or more tranches, subject to appropriate approval, if any,” the company said in its BSE filing.
With the commitment by Kora Management, the group continued with its strategic growth plans initiated in 2017 to separate its three businesses — credit, advisory and insurance — into distinct entities based on synergistic business needs, aligned consumer segments and complementary platforms.
The Credit and Life Insurance businesses have already established long-term partnerships, with a strategic investment of $250 million by CDPQ in credit segment and Tokio Marine’s 49 percent holding in the insurance segment.
“Kora Management’s proposed investment will initiate the third and final process for the advisory business,” Edelweiss said.
“Advisory businesses have shown tremendous growth and contribute significantly to the Group’s profits. We are very enthusiastic about the partnership with Kora Management, as it will support our expansion plans and investments in technology platforms to deliver a superior customer experience, drive cost efficiencies as well as maintain a strong position in each of our advisory businesses,” Nitin Jain, CEO, Edelweiss Global Investment Advisors said.
Meanwhile, Edelweiss Financial Services reported a 50.1 percent year-on-year fall in the June quarter consolidated net profit at Rs 132 crore, but revenue grew by 3.2 percent to Rs 2,513 crore compared to a year ago.
The stock was quoting at Rs 140.65, down Rs 1.75, or 1.23 percent on the BSE at 1231 hours IST on August 14.