Shares of Nuvama Wealth Management climbed as much as 4.3% on Monday to Rs 7,574.60 on BSE, recovering some of Fridays losses after a Sebi order rattled financiers.
Fresh reports of a potential billion-dollar buyout by global personal equity majors reignited interest in the stock.Private equity giants CVC Capital Partners, Permira, and EQT remain in advanced talks with Asia-focused financier PAG to acquire its managing stake in Nuvama (previously Edelweiss Wealth Management) in a deal potentially valued at $1.6 billion, according to a report in TheIndianSubcontinent, pointing out individuals acquainted with the matter.
HSBC, Europes largest bank by market price, is likewise in contention, making it an increasingly competitive bidding process.The 4 shortlisted bidders submitted non-binding offers late last month and are presently conducting due diligence.
Binding offers are expected by the end of July, although analysts think this timeline might be tough to meet.PAG owns a 54.78% stake in Nuvama, valued at Rs 14,383 crore as of Fridays close, out of the companys total market capitalisation of Rs 26,150.87 crore.
Any deal leading to a modification of control will trigger an open offer for 26% of the shares held by minority investors.Warburg Pincus is likewise said to have actually made a spoken a sign deal and is being considered as a fallback alternative.
Domestic fund ChrysCapital is reportedly checking out a possible smaller sized offer or a consortium-based financial investment.
Consortia are likely to get formed as the cheque size is expected to be big, among individuals pointed out told TheIndianSubcontinent.Live EventsJane Street overhang lingersNuvamas stock fell 11% on Friday its sharpest drop in 3 months after Indias securities regulator barred U.S.-based Jane Street from the domestic market over supposed index manipulation to extract big earnings through derivatives trading.
While SEBI did not call Nuvama in its 105-page interim order, the firm came under examination due to its function as Jane Streets on-ground trading partner in India.The Jane Street episode will be a one-time hit however will not have a structural effect, an executive cited in TheIndianSubcontinent report said.
However, valuation might be affected if the matter drags on.Despite being cleared in an earlier NSE examination that was closed in May, Nuvamas prior association with Jane Street triggered financier care.
The company had actually responded to NSEs questions as part of that probe.Jane Street is thought to be a major customer of Nuvamas institutional services service, with some analysts estimating it accounts for up to 40% of revenue in that sector, although this figure might not be individually verified.According to Jefferies, the impact of SEBIs action is anticipated to be uneven across institutions.
While BSE may see restricted disruption, Nuvama might face a more considerable hit.Financial PerformanceNuvama reported a 58% year-on-year increase in revenue after tax in FY25 and delivered a strong return on equity (ROE) of 31%.
In the March quarter, property servicesincluding custody and settlementaccounted for 47% of earnings, while wealth management contributed 35%, with the rest originating from equities and financial investment banking.The property services department dealt with $14.7 billion in institutional properties in FY25, with earnings jumping 85% from FY24, according to company data.Corporate HistoryNuvama was listed in September 2023, following a demerger from Edelweiss Financial Services.
Because its launching, the stock has actually rallied over 114%, consisting of a 55% gain over the past year.PAG had actually acquired control in March 2021 through a $325 million financial investment, and started the sale process earlier this year, selecting JP Morgan and Morgan Stanley as advisers for the deal.|PE groups Permira, CVC Cap, EQT in fray to purchase Nuvama Wealth from PAGIndias wealth market draws global eyesInvestors are eyeing Nuvama for its quickly growing wealth management franchise in a fragmented Indian market, where only 15% of wealth is professionally handled, compared to 75% in industrialized markets.
Indias wealth management industry currently handles an estimated $130160 billion of the countrys amount to $11.2 trillion in wealth.According to ICRA, Nuvamas key strengths include its varied business model and strong financial efficiency, although the company stays exposed to market volatility and reputational threats.|Jane Street clampdown raises big concerns for Sebi: Can the regulator stop another derivatives scams?(Disclaimer: Recommendations, tips, views and opinions given by the specialists are their own.
These do not represent the views of TheIndianSubcontinent)