Private equity investor PAG will invest Rs 2,200 crore in Edelweiss Wealth Management (EWM) to pick up 51 per cent stake as the Edelweiss Group looks to unlock value for shareholders and accelerate business growth.
"This is largest equity raise by Edelweiss Group till date and a visible endorsement of value that has been created in the wealth management business," it said in a statement. This will also be PAG's first majority equity investment in India.
The deal will close after customary regulatory approvals. PAG will become a majority owner of EWM which is a part of Edelweiss Global Investment Advisors.
"The capital surplus that we will generate will help us continue the virtuous cycle of creating and unlocking value that we have followed consistently over the past 25 years," said Rashesh Shah, Chairman and CEO of Edelweiss Financial Services.
"In FY21, we are taking a series of steps that will enable our companies to emerge fully future-ready to participate in the post Covid economic recovery, and for our shareholders to realise the value created in our companies," he added.
EWM's demerger and listing on stock exchanges is expected in the coming 12 to18 months.
Edelweiss Group's structure is organised under six business segments -- corporate credit, retail credit, wealth management, asset management, life insurance and general insurance with legal entities aligned to these six business segments.