Edelweiss Financial Services

never_overpay · December 12, 2025, 5:10am

EFSL - two sets of valuation - July 25 & Dec 25. I cheat and my valuation methods are dirty and unorthodox. I used what I know, and that is not much. So if any of you have a better way to value any of their businesses please do share - In any case I’d love to hear your thoughts and all push back is welcome. I hope this helps. Shorthand numbers are below: (Detailed valuation in the PDF (handwritten) & USD valuation is done at the midpoint of the valuation range in INR. Exchange rate of Rs. 90 = $1). The INR will likely continue to depreciate against the dollar, so return in dollar terms would be less.

EFSL - Dec 2025 Valuation HW .pdf (469.5 KB)

Two Voice Notes from July 2025 & Dec 2025 - explaining the businessess, how to value them and their valuation (along with my personal thoughts. Voice quality is not ideal and the background noise I believe is from the time when I was visiting India) By the time I did the second valuation, I forgot how I did my first one, so please be patient and forgiving. Here are links to voice notes:

Industry reports:
IndustryReportJune2025.pdf (1.7 MB)
nbfc-sector-update-h1fy26.pdf (2.0 MB)
RBI-NBFCs-REPORT-ON-TRENDS-2023-24-26-12-24.pdf (2.6 MB)

Ankit_Mishra · December 29, 2025, 2:03pm

Got this mail from edelweiss-

We refer to our earlier communication dated November 16, 2025, informing the investors of Edelweiss Mutual Fund and Altiva Specialised Investment Fund of the proposed change in control of Edelweiss Asset Management Limited (“EAML”), pursuant to the proposed acquisition of shares by WestBridge Capital, through its affiliates Setu AIF Trust, Konark Trust and MMPL Trust. In accordance with Regulation 22(e) of the SEBI (Mutual Funds) Regulations, 1996, investors were provided with an exit option for a period of fifteen (15) days from November 18, 2025 to December 02, 2025.

We hereby inform you that Edelweiss Financial Services Limited (“EFSL”), the sponsor of Edelweiss Mutual Fund / Altiva SIF , has successfully completed the divestment of its 10% (ten percent) equity shareholding in EAML in favour of Setu AIF Trust, Konark Trust and MMPL Trust, affiliates of WestBridge Capital, on December 17, 2025.

Daljit_Singh · January 18, 2026, 6:52pm

Any news on IPO of EAAA, or we have to wait till the next earning call .

buffet · January 19, 2026, 5:55pm

In the current state of our markets IPO is out of question

Gaurav_Catalyst · January 20, 2026, 7:32am

Considering the amount of debt (o corporate side) Mr. Shah is sitting upon, don’t think he can further delay monetisation of EAAA.

To an extent Nido (HFC), NBFC (ECL Finance) can service its debt servicing obligation.

Most of juice (in terms of free cash available) from EAAA, EARC, EAMC in terms of dividend has already been extracted in first 6 months of this FY.

Remaining pain area i.e. Corporate debt is still standing tall. There is no other option but to sell EAAA (either via IPO or bringing in strategic investor).

Gaurav_Catalyst · January 20, 2026, 7:34am

in above debt reduction on YOY basis, full credit goes to Nuvama Stake sale. Nothing major from FCF from operations.

Srikanth_revoju · January 20, 2026, 3:14pm

EAAA filed DRHP for 1500cr OFS..

Gaurav_Catalyst · January 21, 2026, 5:48am

Total outstanding shares: 6.42 Crores.
Latest related party exchange of shares @ Rs. 925 / share
ESOP exercise price @ Rs. 933 / ESOP
At current rate of quarterly PAT - FY2026 expected PAT approx. Rs. 250 Cr.
Industry average PE: around 40

Let’s see what Mr. Market give multiple to it.

For a listed MCAP of approx. Rs. 10,000 Cr … it will need to have price (either during offer or post listing) of approx. Rs. 1500 per share.

buffet · January 21, 2026, 4:39pm

My point is at this time it is not possible infact most ipos will be postponed. Unless the valuation is very juicy, Edelweiss chairman clearly wants more money for as little stake as possible. So he will delay the ipo as long as broad market doesn’t recover. The current situation is SIPs will be redeemed or diverted to precious metals.

RajAnalyst · January 22, 2026, 5:25am

For 1500 Cr, what % of equity of EAAA is offered? Assuming its 25%, the valuation of the co comes to 6000 Cr

amit.wilson · February 12, 2026, 5:47pm

From the Q3 FY26 Earnings Conference Call, 10-Feb-2026.

EAAA: the plan is to offer 15% of EAAA for Rs 1,500 crore. That values EAAA at Rs 10,000 crore.

That is 85%v of the current hold-co market cap is Rs 11,800 crore.

NIDO: Hold-co has sold part of its stake in the housing finance company (NIDO).

For this, Hold-co receives Rs 600 crore now. And expects to receive another Rs 900 to 1,400 crore in the future for the remaining 26% holding.

Debt reduction plan:

Total corporate debt: Rs 6,500 crore

1. Property-backed Rs 1,500 crore. No plan to repay this.

2. Business Debt Rs 5,000 crore. Over 18-24 months, aim to reduce debt by Rs 4,000 crore.

i. NIDO stake sale: Rs 600 crore now plus Rs 900 to 1,400 crore in the future. Total Rs 1,500 to Rs 2,000 crore

ii. EAAA stake sale: Rs 1,500 crore

iii. Dividends: Rs 1,000 to Rs 1,200 crore

If this happens, theoretically the market cap should rise by Rs 4,000 crore even if the underlying businesses don’t grow at all. To understand this simply, say you own a farm with a market value of Rs 1 crore. You have taken a loan of Rs 30 lakh. If you sold the farm you would pocket Rs 70 lakh after paying back the loan.

But if you grow some crops and sell them, you earn Rs 10 lakh from selling the harvest. You can reduce your loan from Rs 30 lakh to Rs 20 lakh. The farm is now worth Rs 80 lakh to you.

The improvement in value could be higher. Simplistically:

Hold-co NCDs were issued at 8.85% (24 months) to 10.10% (120 months) last year.

A reduction of Rs 4,000 cr of debt, lower interest cost by ~Rs 400 crore per annum assuming 10% interest cost. Profit rises by Rs 400 crore (napkin math). At the current PE ratio of 20, this adds Rs 8,000 crore to the market cap. This is somewhat overstated as often the money received gets used for interest payments, etc. For example, tThe consideration from the sale if the AMC has not lowered debt.

AMC valuation:
WestBridge owns 10% of the AMC and will take another 5% by July 2026. It has paid Rs 300 crore and Rs 150 crore more is due.
The AMC was valued at Rs 3,000 crore in this deal: 57X FY25 PAT of Rs 53 crore. Projected PAT for FY26 is double of previous year. So the valuation could rise to Rs 5,000 to Rs 6,000 crore. This multiple seems high compared to peers.

But with a different metric, the valuation was 2.12% of AUM at the end of FY25. That seems low compared to peers.

AMC Name	Market Cap (Rs Cr)	Total AUM (Rs Cr)	Valuation as % of AUM
ICICI AMC	1,53,673	9,20,600	16.69%
HDFC AMC	1,22,000	8,93,027	13.66%
Nippon Life India	61,450	7,05,000	8.72%
Aditya Birla Sun Life	25,268	4,43,200	5.70%
Edelweiss	9,424	1,65,300	5.70%*

*assume

Using the Aditya Birla AMC valuation benchmark, the AMC could be worth Rs 9,500 crore. Hold-co owns 85% of that = Rs 8,000 crore.

So that is a pretty wide estimate: between Rs 4,250 crore (85% of Rs 5,000 crore) and Rs 8,000 crore.

Putting these together in a partial SOTP:

EAAA: 10,000 crore

AMC: 6,000 crore

NIDO: 1,500 crore

These add up to Rs 17,500 crore.

Adjust for debt of Rs 6,500 crore and Rs 1,000 crore of dividends

That is a partial SOTP of Rs 12,000 crore in two years without any growth.

This does not include the other businesses: ARC, NBFC, General and Life Insurance.

Can this value be 2X in a few years? If so, how long will it take? 3 years >> that is a 25% p.a. return. 6 years >> that is 12% p.a. This investment is a bet on execution, value unlocking and speed.

Disc: invested. Not advice. DYOR.

23_Investments · February 18, 2026, 4:16am

Thanks for the detail

I think it should be faily valued at 160-170 Level

Disc: 20% of PF allocated to the stock

Shreyansh_Chandrakar · February 19, 2026, 2:23am

Many big investors are investing, Edelweiss seems to be fairly valued 160-170

Daljit_Singh · February 19, 2026, 3:58pm

I think last bulk buying was by Abakkus.

It will be very helpful if you can elaborate a little bit on your comment.

Gaurav_Catalyst · March 9, 2026, 4:42am

Pre-IPO placement at valuation of approx. Rs. 8500 Crores for EAAA.

paragbharambe · May 1, 2026, 10:14am

Con call notes

General

Despite significant activity in FY26 ( in term of stake sale), expected cash flow generation is ₹2,500–3,000 crore in FY27.
Fairly confident of achieving break-even in FY27 for insurance business (not sure if it mean YOY or quarterly basis consistently).

Edelweiss Mutual Fund

PAT margin expected to improve from ~6% to ~10% over the next 3–4 years (by 2030); no urgency.
AUM growth aspiration: 18–20% annually.
Cost-to-income ratio:
- Current: ~60%
- Target: 45–50% (industry average) within the next 2–3 years.
Potential listing in the future.

Real Assets & Private Credit

Real Assets:
- Focus on longer-duration funds (5–6 years).
Private Credit:
- Average holding period: ~3 years.
- New fund launches every 2–3 years, driving AUM growth.

Infrastructure Investment Trusts (InvITs)

Growth expected through addition of new assets.
Key strengths:
- In-house operating team managing assets.
- Current focus largely on road assets (transport InvIT).
- Expansion opportunities include:
  - Airports
  - Cable cars
  - Broader transport infrastructure
Transport sector offers:
- High scalability
- Attractive yields

FII Concerns

The Indian Rupee is a major concern for Foreign Institutional Investors (FIIs), impacting investment flows.

Citius InvIT / Asset Recycling Strategy

Potential major beneficiary of EAAA (asset-light strategy, fee-heavy).
Key points:
- Capital recycled from InvIT IPO proceeds.
- Reduces capital intensity, improving ROE.
- Assets continue generating the same income regardless of ownership (on-balance sheet vs InvIT).
- Additional revenue from fee-based income, following global models used by firms like Blackstone/BlackRock.

ECL Finance

As of March 2025, wholesale lending cycle considered behind.
FY26:
- 3x increase in disbursements.
FY27 target:
- ₹1,000–2,000 crore disbursements.
- Expansion via new branches.
Outlook:
- Growth phase for the next ~2 years.
- Profitability expected with a 12–18 month lag.
ROE target:
- ~10% within 18–24 months.

Insurance Business

Investment income turned into a loss (~₹239 crore) due to:
- Market-to-market (MTM) losses
- Weak market conditions
This significantly impacted overall results.

Rishi_Nair · May 3, 2026, 12:34pm

Over and above what’s mentioned by paragbharambe above, my thoughts about a few things mentioned in the concall

EAAA: funds are launched every 2 years. and almost 53% of the money is from foreign investors, 47% domestic. If rupee depreciation stays at current levels or further exacerbates, foreign investors don’t really have much to gain unless it’s a very high yield product.\

Plan for IPO as stated by Mr. Rashesh is within 3-4 months positively if market settles down with the war related news.

He did mention that FPIs are mostly leaving due to the rupee depreciation as against lack of a bullish view on India.

ECL Finance: Wholesale has scaled down, and MSME loans have tripled.

If oil remains elevated, supply chain costs will trickle down to smaller players, and eventually that’s the segment that will be hit.

In my humble opinion - I feel there is a lot of risk, and businesses apart from EAAA, MF and Asset Recon. don’t really have a moat.
There is too much competition in home finance, and insurance space as of now even though the TAM is large.
Profitability is in plans but far away although valid arguments from the management.

I feel the EAAA business is the crown jewel - because that has a moat, unlike the other businesses of the holdco.

Note to myself: Rashesh is a very well spoken leader and it’s easy to fall for words that reassure you a positive outcome time and again. But this is something to be vary of.

Disc: Exiting my position - much better opportunities in this market

SAM2003 · May 7, 2026, 3:05am

How was Edelweiss able to do a private placement of EAAA shares exclusively to loyal investors and employees, while long-term minority shareholders continue to suffer from decades of underperformance? After just 3–4 months, these investors will offload their stake in the FPO and walk away with 50% profit. It may not be illegal, but it certainly raises ethical concerns. Edelweiss has consistently failed to create real wealth, share prices may rise temporarily, but sustainable value has never been generated. That’s why I sold 50% of my holding and moved into JM Financial instead.