Latest news with #EdelweissFinancialServices
Business Standard
08-07-2025
- Business
- Business Standard
Edelweiss Financial to undertake public issue of NCDs worth up to Rs 300 crore
Edelweiss Financial Services has announced the public issue of secured redeemable non-convertible debentures (NCDs) of the face value of Rs 1,000 each for an amount up to Rs 300 crore. The issue has a base issue size of Rs 150 crore and a a green shoe option of up to Rs 150 crore. The issue has 12 series of NCDs carrying fixed coupons and having a tenure of 24 months, 36 months, 60 months, and 120 months with annual, monthly and cumulative interest options. Effective annual interest yield on the NCDs ranges from 9.00% p.a. to 10.49% p.a. The issue is scheduled to open on Tuesday, 08 July 2025 and close on Monday, 21 July 2025. At least 75% of the funds raised through this issue will be used for the purpose of repayment/prepayment of interest and principal of existing borrowings of the company and the balance is proposed to be utilized for general corporate purposes, subject to such utilization not exceeding 25% of the amount raised in the issue. The NCDs proposed to be issued under the issue have been rated Crisil A+ with stable outlook. Edelweiss Financial Services, on standalone basis, is primarily engaged in investment banking services and provides development, managerial and financial support to group entities. The scrip had advanced 1.58% to end at Rs 115.55 on the BSE today.
Mint
19-06-2025
- Business
- Mint
Why some Indian companies are paying dividends despite posting losses
Dividends are typically seen as a signal of financial strength. But this earnings season, several Indian companies are issuing payouts even as their standalone accounts show red ink — a curious contradiction that reflects shifting capital allocation strategies. For some firms, the payouts signal confidence in consolidated profitability despite temporary headwinds. For others, they may serve to reassure investors during ongoing restructurings. Either way, the trend raises a key question: are these dividends a genuine vote of confidence, or a potential red flag that warrants closer scrutiny? Read this | Tata Sons' FY25 revenue is likely to be lower despite record dividends Let's take a closer look at the balance sheets and business strategies driving these payouts. Edelweiss Financial Services: From wholesale woes to asset-light growth First on our list is Edelweiss Financial Services, a diversified financial services company with businesses spanning alternative asset management, mutual funds, asset reconstruction, and life insurance. The company reported a standalone net loss of ₹51.9 crore in FY25. Despite this, it declared a dividend of ₹1.5 per share, an unusual move given the red ink on its standalone books. However, on a consolidated basis, the company remained in the black with a net profit of ₹536 crore as individual businesses showed significant improvements in their bottom line, with notable growth in asset management and reduction in losses for insurance businesses. Over the past year, Edelweiss has been actively diversifying its business model, shifting away from wholesale lending through ECL Finance and expanding into retail financial services and asset reconstruction. This strategic pivot came after the Reserve Bank of India (RBI), in May 2024, barred ECL Finance from undertaking any new structured financing transactions and restricted its operations to winding down existing wholesale exposures. The RBI also prohibited Edelweiss ARC from acquiring fresh bad loans or reorganising existing ones. The wholesale lending book has since been fully wound down, a difficult but necessary step in the company's strategic reset. In its place, the company now offers SME and business loans through an asset-light model by partnering with banks. Going forward, Edelweiss Financial Services plans to grow its business by approximately 20-25% annually over the next 10 years. It also has plans for an initial public offering (IPO) of its alternate asset advisor business – Edelweiss Alternative Asset Advisors (EAAA), with an expected dilution of about 15% (a combination of pre-IPO or IPO). It recently filed the Draft Red Herring Prospectus with the Securities and Exchange Board of India. On the financial front, the company has demonstrated a resilient performance over the last five years. Profit has grown at a CAGR of 17%, despite periods of strategic restructuring and business realignment. That said, its sales growth lags, unlike some peers who are posting double-digit gains. Shares of Edelweiss are up 52% over the last year driven by robust financial performance and improving business prospects. The rally gained further momentum after the RBI lifted restrictions on its companies. As a result, the stock is now trading at a price-to-book value (P/BV) of 2.3x, well above the industry average of 1.4x. This premium valuation reflects market optimism around the company's turnaround efforts. However, it also implies that future earnings growth and execution will need to justify the elevated multiple. Aditya Birla Real Estate: Divestment fuels future real estate ambitions Next on our list is Aditya Birla Real Estate (ABREL), the real estate arm of the Aditya Birla Group. The company reported a standalone net loss of ₹24 crore for FY25, primarily due to a significant decline in revenue and one-time expenses related to the sale of its paper and textile businesses. On a consolidated basis as well, the company reported a net loss of ₹157 crore. Despite this, the board of directors of the company announced a dividend of ₹2 per share. ABREL recently announced the sale of its pulp and paper business, which accounted for nearly 80% of its revenue, to ITC for ₹3,498 crore. The deal, expected to be completed by Q2FY26, will help clean up the company's balance sheet. Post-sale, the company plans to repay around ₹2,000 crore of debt linked to the paper business. As of now, its consolidated debt stands at ₹3,575 crore, with a debt-to-equity ratio of 0.92x. The cash from the deal is also expected to give ABREL a competitive edge, enabling it to partner with landowners through joint ventures and take on new, selective debt to grow its portfolio. Financially, the company has reported a decline in its sales growth over the past five years. Its return ratios are also negative. However, with the divestment of its paper business, this is expected to improve. The company aims to achieve over ₹15,000 crore in annual pre-sales in the next few years, almost double its current booking value in about three years. For FY26, the company plans to launch around ₹14,000 crore of new projects. These launches are largely skewed towards Q3 and Q4, with a couple possibly in Q2. This new launch value, combined with existing sustenance inventory of approximately ₹6,700 crore, means projects worth around ₹20,000 crore will be available for sale in the next 12 months. The company also plans to hit a gross development value (GDV) of ₹1 trillion over the next year. Read this | A ₹3,498 crore paper play: A windfall for ABREL, a growth bet for ITC Shares of ABREL are down 9% over the last year. Still, the stock is trading at a price-to-book value (PBV) of 7.15x, above the industry average (real estate) of 3.2x. The premium reflects investor expectations of a stronger, more focused ABREL post-divestment, though it also raises the bar on execution. SH Kelkar & Company: Navigating fire recovery with fragrance growth Third on our list is SH Kelkar & Co., the largest domestic fragrance producer in India and the only company of Indian origin to file patents in the field of fragrance and novel aroma molecules. FY25 saw SH Kelkar report a standalone net loss of ₹14 crore as additional operating costs due to the fire at its Vashivali factory weighed on the company's operating efficiency. However, on a consolidated basis, the company reported a net profit of ₹73 crore as total revenue grew 10% YoY on account of sustained demand across all segments and healthy traction in the domestic market. As a result, the company announced a dividend of ₹1 per share. This is in line with its dividend policy. SH Kelkar has delivered steady growth, with consolidated revenue rising at a CAGR of 14% and net profit at 13% over the past five years. The management remains confident of sustaining a growth rate above 12% in the medium term and expects to meet this target in FY26, supported by a strong order pipeline and positive market momentum. However, operating profit margins (OPM) have been volatile, ranging between 13% and 16% in recent years. After touching a high of 18% in FY21, margins dropped to 13% in FY23 before recovering to 15% in FY25. The company is now targeting long-term OPM expansion to 18-20% by FY27, aided by improved raw material availability and the gradual impact of price hikes averaging 3-3.5% across its product segments. On the operational front, SH Kelkar is progressing with the re-establishment of its Vashivali fragrance facility, which was impacted by a fire. The plant is expected to be commissioned within FY26, with reconstruction backed by insurance. The company has already received an interim settlement of ₹95 crores, while the remaining claim is under process. Financially, SH Kelkar remains comfortably positioned, with a debt of ₹658 crores translating into a debt-to-equity ratio of 0.44x and an interest coverage ratio of 3.82x. Read this | These five stocks trading below ₹200 offer monster dividends Shares of SH Kelkar have gained over 17% in the past year, reflecting improved investor sentiment on the back of steady growth and margin recovery. As a result, the stock is currently trading at a price-to-earnings (P/E) ratio of 30.8x, which is well above its 10-year average of 24.4x. Manali Petrochemicals: Global headwinds and strategic shifts Last on our list is Manali Petrochemicals. The company is the only domestic manufacturer of Propylene Glycol. It is also the first and largest Indian manufacturer of Propylene Oxide. For FY25, Manali Petrochemicals reported a standalone net loss of ₹9 crore, weighed down by continued global headwinds. Despite the dip in profitability, the company declared a dividend of ₹0.5 per share, signalling confidence in its long-term outlook. On a consolidated basis, however, the company posted a net profit of ₹29 crore, up from ₹19 crore in FY24, driven by improved operational efficiency and better performance from subsidiaries. Strategic initiatives such as cost optimization, a shift toward premium products, and a sharper focus on international markets helped mitigate margin pressures amid a decline in revenue. Profitability also improved sequentially, on a consolidated basis, with the company turning profitable in the second half of the year. While the recovery is still nascent, Manali Petrochemicals' financial performance over the past five years has been marked by volatility. Revenue has grown at a modest CAGR of 2.2% while net profit has declined at a negative CAGR of 9% due to persistent demand softness, pricing pressure, and global supply chain challenges. Operating margins have also eroded significantly, sliding from 32% in FY22 to just 5-6% in FY24 and FY25. Return ratios have also seen a sharp correction with RoE and RoCE dropping steadily after FY22, landing at 2.92% and 4.83% in FY25. Read this | data-vars-page-type="story" data-vars-link-type="Manual">For Vedanta, dividends and demerger delays play spoilsport The stock of Manali Petrochemical has fallen 20% over the last year. However, over the last six months, shares of the company are up 11%. On the valuation front, the stock appears relatively inexpensive, trading at a price-to-book value (PBV) of 1.11x, below the industry average of 2.16x, indicating potential undervaluation, especially if the company can sustain or improve its recent profitability at the consolidated level. Beyond the payout: Decoding investor signals The recent trend of companies issuing dividends despite standalone losses undeniably marks a strategic shift in how they signal financial resilience and future prospects. This move often hinges on the strength of their consolidated financial performance, the successful execution of ambitious strategic realignments, or a firm belief in an impending turnaround. However, for the discerning investor, these "red-ink dividends" demand meticulous scrutiny. While they can indeed be a vote of confidence from management, they can also mask underlying vulnerabilities or over-optimistic projections. For more such analyses, read Profit Pulse. It is paramount to look beyond the immediate payout and delve into the consolidated financials, debt structures, growth strategies, and the broader industry landscape. A dividend today, no matter how generous, carries little value if it's not underpinned by sustainable, long-term financial health and robust execution. About the author: Ayesha Shetty is a research analyst registered with the Securities and Exchange Board of India. She is a certified Financial Risk Manager (FRM) and is working toward the Chartered Financial Analyst (CFA) designation. Disclosure: The author does not hold shares in any of the companies discussed. The views expressed are for informational purposes only and should not be considered investment advice. Readers should conduct their own research and consult a financial professional before making investment decisions.
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Business Standard
21-05-2025
- Business
- Business Standard
Edelweiss Financial Services rises 3% after Carnelian Asset buys stake
Edelweiss Financial Services share price gained 3.2 per cent in trade on Wednesday, logging an intraday high at ₹96.69 per share on BSE. The stock surged a day after shares were bought by Carnelian Asset Management and Advisors via a bulk deal on BSE. At 1:10 PM, Religare Enterprises shares were up 2.03 per cent at ₹95.59 per share on the BSE. In comparison, the BSE Sensex was up 0.45 per cent at 81,552.86. The market capitalisation of the company stood at ₹9,041.41 crore. The 52-week high of the stock was at ₹145.5 per share and the 52-week low of the stock was at ₹59.4 per share. ALSO READ: Edelweiss Financial Services bulk deal details On Tuesday, Carnelian Asset Management and Advisors, promoted acquired 80,00,000 shares of Edelweiss at an average price of ₹90.4 per share. However, the Edelweiss Employees Welfare Trust offloaded 1,60,00,000 shares in the company at the same price. On May 14, CLSA trimmed its holding by divesting a 1.2 per cent stake in Edelweiss Financial Services for ₹100 crore through an open market transaction. Hong Kong-based CLSA through its affiliate -- CLSA Global Markets Pte -- offloaded a little over 11.3 million shares, or 1.2 per cent stake, in Edelweiss Financial Services, as per the bulk deal data available on the National Stock Exchange (NSE). The shares were disposed of at an average price of ₹88.55 apiece, taking the transaction value to ₹100.08 crore. After the latest transaction, CLSA's holding through its arm in Edelweiss Financial Services has declined to 4.54 per cent from 5.74 per cent. Meanwhile, US-based Miri Capital Management through its arm -- the Miri Strategic Emerging Markets Fund LP -- bought more than 11 million shares, or 1.16 per cent stake in Edelweiss Financial Services for ₹98 crore. The shares were picked up at the same price. About Edelweiss Financial Services Edelweiss Financial Services Limited is an Indian financial services conglomerate headquartered in Mumbai. The company has evolved from a boutique investment bank into a diversified entity offering a comprehensive suite of financial products and services.
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Business Standard
20-05-2025
- Business
- Business Standard
Edelweiss Employees Trust divests 1.7% stake in Edelweiss Fin for ₹145 cr
Edelweiss Employees Welfare Trust on Tuesday sold a 1.7 per cent stake in Edelweiss Financial Services for approximately ₹145 crore through an open market transaction. According to bulk deal data on the BSE, the trust offloaded 16 million shares, amounting to a 1.7 per cent stake in the company. The shares were sold at an average price of ₹90.40 apiece, resulting in a total transaction value of ₹144.64 crore. As of the March quarter, Edelweiss Employees Welfare Trust held a 1.81 per cent stake in the company. Carnelian, Others Acquire Stake In a parallel development, Mumbai-based Carnelian Asset Management & Advisors acquired 8 million shares—equivalent to a 0.85 per cent stake in Edelweiss Financial Services. These were purchased at the same average price of ₹90.40 per share, valuing the deal at ₹72.32 crore. Information on additional buyers in the transaction was not immediately available. On Tuesday, shares of Edelweiss Financial Services closed 3.15 per cent higher at ₹94.18 on the BSE. CLSA Trims Stake Earlier, on 14 May, capital market and investment firm CLSA sold a 1.2 per cent stake in Edelweiss Financial Services for ₹100 crore through an open market transaction. CLSA, via its affiliate CLSA Global Markets Pte, offloaded over 11.3 million shares at an average price of ₹88.55 each, amounting to a deal value of ₹100.08 crore, as per bulk deal data from the National Stock Exchange (NSE). Following the sale, CLSA's stake in Edelweiss Financial Services decreased from 5.74 per cent to 4.54 per cent. Miri Capital Also Buys Meanwhile, US-based Miri Capital Management acquired over 11 million shares—representing a 1.16 per cent stake—in Edelweiss Financial Services for ₹98 crore. The purchase was made through its investment arm, Miri Strategic Emerging Markets Fund LP.
Business Standard
14-05-2025
- Business
- Business Standard
CLSA divests 1.2% stake in Edelweiss Financial Services for Rs 100 crore
Capital market and investment firm CLSA on Wednesday trimmed its holding by divesting a 1.2 per cent stake in Edelweiss Financial Services for Rs 100 crore through an open market transaction. Hong Kong-based CLSA through its affiliate -- CLSA Global Markets Pte -- offloaded a little over 1.13 crore shares, or 1.2 per cent stake, in Edelweiss Financial Services, as per the bulk deal data available on the National Stock Exchange (NSE). The shares were disposed of at an average price of Rs 88.55 apiece, taking the transaction value to Rs 100.08 crore. After the latest transaction, CLSA's holding through its arm in Edelweiss Financial Services has declined to 4.54 per cent from 5.74 per cent. Meanwhile, US-based Miri Capital Management through its arm -- the Miri Strategic Emerging Markets Fund LP -- bought more than 1.10 crore shares, or 1.16 per cent stake in Edelweiss Financial Services for Rs 98 crore. The shares were picked up at the same price. Details of the other buyers of Edelweiss Financial Services shares could not be ascertained on the exchange. On Wednesday, shares of Edelweiss Financial Services appreciated 0.93 per cent to close at Rs 87.24 apiece on the NSE. In a separate block deal on the NSE, American multinational Citigroup on Wednesday bought shares of Max Healthcare Institute, InfoEdge, and Waaree Energies collectively for Rs 78 crore through open market transactions. Citigroup through its affiliate -- Citigroup Global Markets Mauritius -- bought 2.58 lakh shares of Max Healthcare, acquired 2.12 lakh scrips of Info Edge (India) and Citigroup picked up 60,398 shares of Waaree Energies. The shares were acquired in the price range of Rs 1,172-2,690.10 apiece, taking the combined transaction value to Rs 77.66 crore. Meanwhile, investment banking company Morgan Stanley, through its arm Morgan Stanley Asia Singapore, offloaded the same number of shares at the same price on the bourse. Shares of Waaree Energies on Wednesday rose 4.05 per cent to close at Rs 2,799 apiece, and the scrip of Max Healthcare went up 0.60 per cent to settle at Rs 1,179 apiece. However, shares of Info Edge (India) fell 0.24 per cent to end at Rs 1,461 apiece on the NSE. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
