Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Regulatory Disclosure: 
Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

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Compliance/Grievance Officer:
Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

Edelweiss Financial Services / Equity Bottom-Up

<ul>
<li>Edelweiss reported a decent Q2FY24 with ex-Insurance PAT of INR 153cr vs INR 133cr YoY. All the businesses - ARC, Asset Management and Credit - performed well.</li>
<li>Edelweiss is making decent progress in the Credit business aided by the co-lending business model. 80% of disbursals in NBFC and 30% in Housing Finance in Q2FY24 were through co-lending.</li>
<li>Edelweiss is in process of selling a minority stake in its Alternative Asset Management business for value unlocking. It plans to sell 10-20% equity stake for INR 1500-2000cr.</li>
</ul>


Edelweiss reported a decent Q2FY24 with ex-Insurance PAT of INR 153cr vs INR 133cr YoY. All the businesses - ARC, Asset Management and Credit - performed well.
Edelweiss is making decent progress in the Credit business aided by the co-lending business model. 80% of disbursals in NBFC and 30% in Housing Finance in Q2FY24 were through co-lending.
Edelweiss is in process of selling a minority stake in its Alternative Asset Management business for value unlocking. It plans to sell 10-20% equity stake for INR 1500-2000cr.


Edelweiss: Hitting All the Right Notes to Scale Up Businesses and Unlock Value

Market & Forensics Analyst, Beat the Street

Nimish Maheshwari

Market & Forensics Analyst

Beat the Street

Beat The Street was founded by Nimish Maheshwari and Sudarshan Bhandari, both of whom are Chartered Accountants by Profession, known for their expert analysis in the fields of Business, Sectoral analysis, and Corporate governance.

With a strong social media presence of 45,000+ Subscribers across various platforms, they are considered trusted voices in the industry. Their insights and analysis have been featured in some of India’s most prominent publications, including the Economic Times, Dalal Street Investment Journal, The Morning Context, and The Ken.

Their analysis on Bankrupt & Insolvent companies has been instrumental in saving investors from significant losses. They have a keen eye for identifying red flags and has identified exclusive redflags earlier in Vedanta, Nykaa, Dhani Services, Adani and many more.

Read Business Not Stock Prices

<ul>
<li>
<a href="https://www.smartkarma.com/entities/icici-securities-ltd" target="_blank" data-smartkarma-citation="entities:26737:1" rel="noopener">ICICI Securities Ltd (ISEC IN)</a> Turbulent Journey: From a disappointing IPO to a challenging delisting attempt.</li>
<li>
Delisting Plan and Shareholder Discontent: <a href="https://www.smartkarma.com/entities/icici-securities-ltd" target="_blank" data-smartkarma-citation="entities:26737:1" rel="noopener">ICICI Securities Ltd (ISEC IN)</a>  seeks to become a wholly-owned subsidiary of <a href="https://www.smartkarma.com/entities/icici-bank-ltd" target="_blank" data-smartkarma-citation="entities:547:1" rel="noopener">ICICI Bank Ltd (ICICIBC IN)</a>, facing resistance from minority shareholders.</li>
<li>
Uncertain Future: The outcome of the delisting hinges on the decisions of institutional shareholders like <a href="https://www.smartkarma.com/entities/life-insurance-corp-of-india" target="_blank" data-smartkarma-citation="entities:28829:1" rel="noopener">Life Insurance of India (LICI IN)</a>  and the board's actions.</li>
</ul>



ICICI Securities Ltd (ISEC IN) Turbulent Journey: From a disappointing IPO to a challenging delisting attempt.

Delisting Plan and Shareholder Discontent: ICICI Securities Ltd (ISEC IN)  seeks to become a wholly-owned subsidiary of ICICI Bank Ltd (ICICIBC IN), facing resistance from minority shareholders.

Uncertain Future: The outcome of the delisting hinges on the decisions of institutional shareholders like Life Insurance of India (LICI IN)  and the board's actions.


ICICI Securities Delisting: A Deja Vu of Troubles

<ul>
<li>Edelweiss reported a strong Q1FY24 earnings led by its asset management and ARC businesses. In particular, the asset management business is scaling up well for Edelweiss.</li>
<li>In the ARC business, Edelweiss saw strong recoveries during Q1FY24. Also, gradually, Edelweiss is scaling up the retail ARC business.</li>
<li>The credit business continues to see reduction in the wholesale loan book AUM. Asset quality remains stabilized and the co-lending model is helping Edelweiss to grow well.</li>
</ul>


Edelweiss reported a strong Q1FY24 earnings led by its asset management and ARC businesses. In particular, the asset management business is scaling up well for Edelweiss.
In the ARC business, Edelweiss saw strong recoveries during Q1FY24. Also, gradually, Edelweiss is scaling up the retail ARC business.
The credit business continues to see reduction in the wholesale loan book AUM. Asset quality remains stabilized and the co-lending model is helping Edelweiss to grow well.


<ul>
<li>Edelweiss reported a decent Q4FY23. Across businesses, Edelweiss reported strong growth. The credit business is also now scaling up with Q4FY23 disbursements at INR 400cr in housing finance.</li>
<li>The demerger of Nuvama Wealth Management is now complete with record date as Jun 2 2023. Nuvama is on track to list on the exchanges by the end of July.</li>
<li>Based on our sum-of-the-parts valuation, Edelweiss can be valued at INR 15000cr+. At the current market cap of INR 4400cr, it is trading at a huge discount of 70%+.</li>
</ul>


Edelweiss reported a decent Q4FY23. Across businesses, Edelweiss reported strong growth. The credit business is also now scaling up with Q4FY23 disbursements at INR 400cr in housing finance.
The demerger of Nuvama Wealth Management is now complete with record date as Jun 2 2023. Nuvama is on track to list on the exchanges by the end of July.
Based on our sum-of-the-parts valuation, Edelweiss can be valued at INR 15000cr+. At the current market cap of INR 4400cr, it is trading at a huge discount of 70%+.


Edelweiss: Retail Credit Business Is Now Scaling Up | Rest of the Businesses Continue to Grow Strong

<ul>
<li>Edelweiss' stock was down over -5% yesterday. The reason for downfall seems to be a <a href="https://www.business-standard.com/pti-stories/news/three-top-brokers-face-multiple-probes-including-for-money-laundering-fraudulent-trades-123051400524_1.html" target="_blank" rel="noopener">media article</a> which states that three large brokers are being investigated for money laundering activities.</li>
<li>We think Edelweiss is not one of them as the article mentions that these brokers are being investigated since their involvement in the NSEL scam, where Edelweiss had no involvement.</li>
<li>In fact, <a href="https://www.smartkarma.com/entities/edelweiss-financial-services-ltd" target="_blank" data-smartkarma-citation="entities:15015:1" rel="noopener">Edelweiss</a> was among the few brokers that had come out unscathed in the NSEL scam, as it detected early on that there was some wrongdoing happening at NSEL.</li>
</ul>


Edelweiss' stock was down over -5% yesterday. The reason for downfall seems to be a media article which states that three large brokers are being investigated for money laundering activities.
We think Edelweiss is not one of them as the article mentions that these brokers are being investigated since their involvement in the NSEL scam, where Edelweiss had no involvement.
In fact, Edelweiss was among the few brokers that had come out unscathed in the NSEL scam, as it detected early on that there was some wrongdoing happening at NSEL.


Edelweiss: Recent Volatility In The Stock Seems Unwarranted

India

Edelweiss Financial Services is a diversified Indian financial services conglomerate offering a broad range of products and services, including credit (retail and corporate), asset management (mutual funds and alternative assets), asset reconstruction, and insurance (life and general). The company caters to corporations, institutions, and individuals, providing solutions such as investment banking, wealth management, and advisory services. Headquartered in Mumbai, India, it was founded in 1995.

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Edelweiss Financial Services (EDEL IN)

Edelweiss: Hitting All the Right Notes to Scale Up Businesses and Unlock Value

Edelweiss reported a decent Q2FY24. All its businesses are scaling up well leading to improved profitability and growth. Credit business is also...

Ankit Agrawal, CFA

ICICI Securities Delisting: A Deja Vu of Troubles

ICICI Securities faces challenges with its delisting attempt as minority shareholders resist. The outcome remains uncertain, depending on...

Nimish Maheshwari

Edelweiss: Ripe for Re-Rating

An investment in Edelweiss' stock at the current levels has potential to more than triple over a holding period of 3 to 5 years. The worst is over...

Ankit Agrawal, CFA

Edelweiss: Retail Credit Business Is Now Scaling Up | Rest of the Businesses Continue to Grow Strong

An investment in Edelweiss at the current market cap of INR 4400cr has potential to more than triple. Credit business is now scaling up. Rest of...

Ankit Agrawal, CFA

Edelweiss: Recent Volatility In The Stock Seems Unwarranted

Edelweiss' stock has seen significant volatility recently. It seems to have been driven by a media article. However, the market seems to be...

Ankit Agrawal, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Edelweiss: Hitting All the Right Notes to Scale Up Businesses and Unlock Value

Edelweiss reported a decent Q2FY24. All its businesses are scaling up well leading to improved profitability and growth. Credit business is also...

Ankit Agrawal, CFA

ICICI Securities Delisting: A Deja Vu of Troubles

​ICICI Securities faces challenges with its delisting attempt as minority shareholders resist. The outcome remains uncertain, depending on...

Nimish Maheshwari

Edelweiss: Ripe for Re-Rating

An investment in Edelweiss' stock at the current levels has potential to more than triple over a holding period of 3 to 5 years. The worst is over...

Ankit Agrawal, CFA

Edelweiss: Retail Credit Business Is Now Scaling Up | Rest of the Businesses Continue to Grow Strong

An investment in Edelweiss at the current market cap of INR 4400cr has potential to more than triple. Credit business is now scaling up. Rest of...

Ankit Agrawal, CFA

Edelweiss: Recent Volatility In The Stock Seems Unwarranted

Edelweiss' stock has seen significant volatility recently. It seems to have been driven by a media article. However, the market seems to be...

Ankit Agrawal, CFA

ICICI Securities faces challenges with its delisting attempt as minority shareholders resist. The outcome remains uncertain, depending on...