This Investment is by Edelweiss Crossover equity fund (an alternate pre-IPO fund from Edelweiss)⌠Nothing to do much with Edelweiss as stock, as edelweiss will get just fees income with this fund nothing much after that.
Edelweiss AMC emerges frontrunner to manage govtâs debt ETF
via The Economic Times App(Download Now):
http://ecoti.in/etapps
Any thoughts on what impact this can have on bottom line ??
IMO, Charging 0.05% of the AUM as expense fee will not give immediate benefit to the P&L but it just solidifies their strong position in debt issuance market further. This will create a new AAA debt index and there are benefits of âowning and managingâ an important new index. It might help their other business lines like IB, their own public debt funds, insurance etc.
Doesnât look good for Edelweiss ARC. Essar promotersâ connection in the opposition is a common knowledge and SBI seems to be trying to exit before the general elections. Time is running out for the biggest prize in ARC biz. Quite a few other minor hurdles and setbacks.
A good assessment of the current Essar situation. Longer timeframe for resolution and lower proportion realised through IBC process does not hold good for Edelweiss.
I have attempted to value Edelweiss; my estimate comes to around 20.5K Cr. I believe the assumptions are conservative. I have tried to be roughly right than precisely wrong.
Please share your thoughts.
Disc: Invested; views biased.
Edelweiss Value.pdf (35.7 KB)
Edelâs stake in ARC is 60% on fully diluted basis. I am unable to find Capital market biz i.e. IB, Brokerage etc.
Thanks for sharing your views.
What is âSOâ - 93.21?
have they given the split for Financial Services? (book value for nbfc & ARC?) and why are we taking 5% of AUM as correct way of valuing wealth management?
Sumitbhai: Thanks for pointing out the flawed assumption regarding Edelâs stake in the ARC. Will suitably modify the working to reflect on the value of the business.
I have not valued the Capital Markets vertical. The contribution from this business to the P&L has been gradually declining (in % terms) since the IPO. I would prefer to view this business as an âenablerâ to some of the other verticals. How the management grows / transforms the âInvestment Bankingâ component of this vertical would need to be seen, going forward.
Vivekbhai: Shares Outstanding; sorry about the lack of context. The number (in cr.) is Screener data.
Deepsbhai: The companyâs presentations refer to the âCredit Businessâ, broken down into Retail, Corporate and Distressed.
I do not know whether valuing the FAB in AUM terms is THE correct way. However, for the Asset Management industry, it seems to be one of the commonly employed ways to value the business. Edel is a large player in the Wealth Management space; Alternative Assets seems to be niche space requiring substantial management bandwidth; the company seems well placed here also. I have taken 5% as a rough â but conservative â number.
@Rezang_La Can you please modify your valuation sheet as per @sumi00 stake guidance and also wealth /asset management based on PE multiple.
Also what is this alternate asset about ?. Is this PMS/AIF � Sorry for my ignorance but please enlighten
Q3 FY19 results
SC upholds Ban on promoters participating in Resolution under IBC.
Parliament formulates a law - court can only interpret law. Anyways the law has a lacuna and they need to clarify - genuine business failures should not have the same result - promoters should be given a window to repay the loan by bringing in equity
IMHO, this order confirms the power and duties of legislature and judiciary. If interested, pl read justice Narimans full order which is now available, 150pages but quite readable.
In the Distressed Credit segment, RoE & RoA have gone from 21.3% & 4.2% in Q2 to 37.2% & 8.4% in Q3. All thanks to Brajsaab? 
This is going to be key differentiation for Edel as an NBFC. They have indicated that 20-25% RoE is sustainable in ARC business but it is going to be very lumpy. This quarterâs ARC nos are mainly due to one-off recoveries like Binani. Essar resolution is nearby and perhaps the last one in steel but the next wave of earnings will come from Power assets that too dependent on polices of the new govt. I think pricing of impaired asset will get impacted due to outsized returns they are making offlate and consequent rising competition.