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Edelweiss raises $500 million, reports 80% fall in Q2 net

Mumbai: Edelweiss Group said on Tuesday it raised $500 million for two separate investment platforms as the Mumbai-based financial services firm is looking to expand its real estate and investment advisory businesses.

Edelweiss has partnered South Korea’s Meritz Financial group to launch the first fund of $425 million for financing housing projects stuck due to liquidity or solvency constraints. It is also planning to raise up to $1 billion from global institutional investors over the next one year for its real estate financing platform.

ET first reported about the potential transaction on November 11.

Edelweiss reported an 81 per cent fall in its quarterly net profit for the three months ended September 30 at Rs 51 crore against Rs 272 crore a year ago. Total revenues also fell to Rs 2,405 crore from Rs 2,676 crore in the second quarter of FY19.
edelweiss graph

At the end of second quarter of FY20, retail credit book was at Rs 15,111 crore and corporate loan book at Rs 16,178 crore. Gross bad loans stood at 2.73 per cent and net at 1.66 per cent.

Edelweiss has partnered with Sanaka Capital, a private equity firm floated by former co-head of the Asia Growth Capital team of Carlyle Group, Shankar Narayanan, to raise funds for its investment advisory platform. Sanaka, along with others, will invest up to $75 million in the platform, Edelweiss said.

Sanaka Capital has committed to invest $44 million and talks are on with its co-investors for a further investment of $31 million in the business.

Shankar Narayanan, who quit Carlyle to float Sanaka last year, previously led an investment in Edelweiss’ holding company in 2011. Carlyle could gain multibagger returns from that investment, which it exited in 2017.

“We are the only firm to have raised equity thrice over the last challenging year and the first tranche of funding from investors has been received. We now have sufficient firepower to enable us to scale up our businesses in retail credit, wealth management and alternatives asset management significantly,” said Rashesh Shah, chairman, Edelweiss Financial Services.
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