Edelweiss Group has agreed to sell a stake of 51% in Edelweiss Wealth Management (EWM) to Asia-focused investment group Pacific Alliance Group (PAG) for about INR22bn ($300m).
According to the Indian financial services company, the deal values 100% of the business at INR44bn ($600m).
Edelweiss Wealth Management is claimed by its parent firm to be the second-largest non-bank wealth management business in India. Edelweiss Group said that its partnership with Pacific Alliance Group will help in unlocking value for shareholders and speeding up business growth, powered by the latter’s capital, business expertise, and international experience.
The wealth management business involved in the deal includes capital markets. It offers wealth management services to more than 2,400 wealthy families in India.
Besides, Edelweiss Wealth Management is said to cater to nearly 610,000 high net-worth individuals and other affluent clients.
The business is claimed to have expanded its customer assets under advice with an approximately 44% cumulative annualised growth rate from INR185bn ($2.52bn) in the fiscal year 2015 to INR1.27trillion ($17.29bn) in the first quarter of the fiscal year 2021.
Edelweiss Group said that the investment by Pacific Alliance Group in the wealth management unit is part of its strategy to independently build capitalised and self-sufficient businesses. The Indian financial services firm said that the deal represents the largest equity raised by it so far and is a clear endorsement of the value that has been generated in Edelweiss Wealth Management.
Edelweiss Group chairman and CEO Rashesh Shah said: “In PAG we have found a great partner with global experience and strong capabilities. This investment endorses our core strategy of incubating businesses, building value and growing them into market leaders as they gradually move from inter-dependence to independence.
“We remain committed to unlocking value for businesses and shareholders alike and remain future-ready to ride the economic trajectory post COVID.”
For Pacific Alliance Group, the transaction marks its first majority equity investment in India.
PAG CEO comments on the acquisition of stake in Edelweiss Wealth Management
Pacific Alliance Group chairman and CEO Weijian Shan said: “PAG is committed to India’s market as we strongly believe in the long-term growth of the economy. The investment in Edelweiss Wealth marks a milestone in PAG’s investments in the India market.”
The deal is subject to regulatory approvals and is likely to close in the coming four to six months, said Edelweiss Group.
