Goldman Sachs, Fidelity, Kotak MF invest in Edelweiss QIP

Edelweiss Financial Services said it raised Rs 1,527.75 crore by selling its shares to institutional investors through the Qualified Institutions Placement (QIP) route, the first time it has raised funds by selling shares after the IPO ten years ago.

The QIP opened on November 15, 2017 and closed on November 20, 20 17.

It sold 54.56 mln at Rs 280.00 each, a discount of 1.80 percent or Rs 5.14 to the QIP floor price of Rs 285.14.

The funds raised through the QIP would be utilised to augment long term resources, to fund growth and expansion, maintain capital adequacy, consolidation of its subsidiaries, general corporate purposes, etc., the company said.

The issue saw subscription from foreign as well as domestic QIBs.

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. QIP, unlike IPP, is considered a private sale of shares.

“We are delighted with the way 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,” said Rashesh Shah, Chairman, Managing Director and CEO of EFSL.

Edelweiss offers services in retail and corporate credit, wealth management, asset management, capital markets and 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”.

Caisse de Dépôt et Placement du Québec (CDPQ), the second -largest pension fund in Canada was also a participant, it said.

CDPQ had earlier 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.

“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 company said.

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 company added.