https://tijorifinance.com/company/edelweiss-financial-services-limited/#operationalmetrics
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I understand we are positively biased on Edelweiss while discussing here, however it would be great if we can talk and discuss more in details about the negative bias as well. That would bring about different perspective to value the company.
My concerns are on whistle blower issue that happened few days back and the way they did nothing with their recent sales of business and eroded that capitals as impairments in last quarter.
Also, the management is not walking the talk as well from past 2 years.
I may sound naive, however, good to get some perspective from Gurus here.
Let me know if this post is not right, and I’ll delete it.
Cheers,
Shalabh
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Bro, I believe everyone is naive when it comes to investing.
Since you have shown concern over the whistleblower I want to present my finding. Bro, after the whistleblower news, I researched a lot on that whistleblower. But, TBH, I found that that whistleblower doesn’t have any ground for the allegation. However, He seems to have a motive.
And, other than that what interesting I found is, that before 18 march, just before the allegation news, lots of promoters were selling their stake in edelweiss, but after that, selling suddenly stopped. Last, when any promoter/employee sold their stake was 16 march. What It is telling us, is that people were aware of that whistleblower allegation. And they were expecting the news.
After the news, Rashesh Shah and Venkat Swamy got attentive. Suddenly they started to unpledged their share. It is clear that they don’t want to lose their company bcz of share price reduction. Seems to me threat of Motivated allegation. If they had bad intentions they would let margin call hit, so they can get rid of it. So I don’t think there is any corporate governance issue.
The second concern you raised is Impairment. I think that is a major concern, to be honest. to invest in edelweiss. For two years Rashesh shah keeps lying about the quality of his asset book. Right now, even I am not sure where we heading. But my conviction is on the edelweiss brand. I am expecting they must be doing everything to save their business. People do lie when it comes to business. No one is 100 honest. But the question is, is it in the company’s favor? I think yes, so I am sitting on it. Let’s see, how it going to pan out.
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Thank you Gaurav on the insight of the whistleblower aspect. I’ll research more on this front if I find something as well based on your analysis. It does look instigated as you said, however we may have to look back and delve further on the exact concerns raised.
Secondly, I may partly agree that every business is not 100% honest, and we may need to dissect more on the impairment and allocation and balance sheet strength. Because, else, they keep selling business and we are still writing it off with no any additional value to the company. It happened once it may happen again, who knows, however what positive aspects are for this step is yet to be seen.
Edelweiss brand no doubt is what I’m betting on as well, however my secondary bet was on Rasesh Shah, however Off late, I’m not sure if I can rely on latter, as I do not have any thesis to be so in past 2-3 years.
However, your insights on whistleblower thing is quite helpful and will help me further on some analysis. I do think it may be instigated.
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Any comments?
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I am really satisfied with the result. Happy to know that finally they didnt had to do more impairment like they hinted in their last concall. The result was exactly how I wanted/expected it to be.
But we still have to see atleast 3 consecutive quarter to be sure that they going to do good
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Edelweiss has released investor letter for Q1. This is the first time they are doing it and offer some more information. However, I find most of the information in it is already present in presentation, but good efforts nevertheless.
Quarterly-Investor-Letter-Q1FY22.pdf (edelweissfin.com)
By the way, it seems that they stopped hosting con-call.
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Does anyone have the link to the Q1 earnings call audio/transcript? Surprisingly I can’t find it anywhere. Thanks!
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one more ncd.
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They have raised this amount to participate in the pre-ipo market for especially for internet/platform based businesses. They mentioned that most of these venture capitalist backed ipo’s have very few Indian participants in pre-ipo market, so they wish to show domestic participation in here. A good move as per me.
This is what I read in articles, please correct me if I am wrong.
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Why are they offerring very high interest rate 9.7%? Dont you think it is too high compare to current interest rate?
Also, promoters are selling their holding continuously. This looks a bit risky to me.
https://trendlyne.com/equity/insider-trading-sast/all/EDELWEISS/357/edelweiss-financial-services-ltd/
Himanshu Kaji is a KMP. He joined somewhere in year 2010 ( Info. as per annual report). Since then he has been allotted ESOPs every year. He was being alloted ESOPs from 2010 but its only in 2015 we see his shareholding.
His holding in 2016:
2017:
2018:
2019:
2020
2021:
He seems to be reducing from 2021 onwards.
As on date 14.08.2021 he holds 1487500 qty. ( as per BSE filing)
Reason is still not clear why he is selling. His selling is a matter of concern as he is KMP.
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Anual report
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This may be useful in figuring out something.
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Their intigrity is always on stake …really bad corporate governance…no clarification from Rashesh shah yet
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Found this credit report very insightful, interesting-
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So many insider employees are selling there stocks can anyone explain why this is happening? Is there any threat which the retail investors cannot see?
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Yeah, sudden employee selling in August is alarming. Even during worse months in recent history, I don’t see such aggressive selling.
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I think we just need to confirm that are these people from wealth management? Cause i guess PAG might be recruting there own management and letting these people go.
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