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 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

<ul>
<li>A key re-rating trigger for Edelweiss' stock is nearing as its wealth management (WM) arm gets close to demerge and list over the next couple of months.</li>
<li>Edelweiss' WM business could list at a market cap of around INR 8750cr, suggesting that Edelweiss' 44% stake in it alone could be valued at INR 3850cr.</li>
<li>Edelweiss also reported strong Q3FY23 earnings with 31% YoY growth in ex-insurance PAT. Edelweiss has significant potential to re-rate over the next couple of years as the credit business normalizes.</li>
</ul>


A key re-rating trigger for Edelweiss' stock is nearing as its wealth management (WM) arm gets close to demerge and list over the next couple of months.
Edelweiss' WM business could list at a market cap of around INR 8750cr, suggesting that Edelweiss' 44% stake in it alone could be valued at INR 3850cr.
Edelweiss also reported strong Q3FY23 earnings with 31% YoY growth in ex-insurance PAT. Edelweiss has significant potential to re-rate over the next couple of years as the credit business normalizes.


Edelweiss: Wealth Management Arm Demerger Is Nearing

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Kfin Technologies  / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kfin-technologies" target="_blank" data-smartkarma-citation="entities:36609:1" rel="noopener">KFin Technologies (1804170D IN)</a> is looking to raise around US$180m in its India IPO.</li>
<li>KFin Technology (KFin) is a technology driven financial services platform providing comprehensive services and solutions to the capital markets ecosystem.</li>
<li>In this note, we will look at its RHP updates, peer comparison, earnings assumptions, and share our thoughts on valuation.</li>
</ul>



KFin Technologies (1804170D IN) is looking to raise around US$180m in its India IPO.
KFin Technology (KFin) is a technology driven financial services platform providing comprehensive services and solutions to the capital markets ecosystem.
In this note, we will look at its RHP updates, peer comparison, earnings assumptions, and share our thoughts on valuation.


KFin Technologies IPO - Profit Growth Has Outpaced Peer, However Valuation Isn’t Cheap

India

Edelweiss Financial Services Ltd. provides financial services.  The Company offers financial services including lines of credit, investment banking, institutional and retail broking, financial planning, asset advisory, life insurance, and investment management services.

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Edelweiss Financial Services (EDEL IN)

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

Edelweiss: Wealth Management Arm Demerger Is Nearing

Edelweiss' stock has potential to triple over the next couple of years as its credit business normalizes. The separate listing of its wealth...

Ankit Agrawal, CFA

KFin Technologies IPO - Profit Growth Has Outpaced Peer, However Valuation Isn’t Cheap

KFin Technologies (1804170D IN) is looking to raise around US$180m in its India IPO. In this note, we will look at its RHP updates, peer...

Clarence Chu

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