Edelweiss To Focus On Unlocking Value Over Next 12 Months, Says Rashesh Shah

Edelweiss Financial Services Ltd. will focus on "unlocking value" over the next 12 months, Group Chairman Rashesh Shah said, while pointing towards the fundraise plans of two subsidiaries of the company.

EAAA India Alternatives Ltd. has already filed for an initial public offering, whereas Edelweiss Asset Management Ltd. will be "going for a stake sale," Shah said while speaking to NDTV Profit on Wednesday.

The draft papers for the EAAA IPO were filed with the Securities and Exchange Board of India earlier this month. Asked about the timeline for the Rs 1,500-crore public offer as well as the stake sale plans of the mutual fund arm, Shah said, "Let's say that by FY26, we would like to get it done."

The remarks came a day after Edelweiss received relief from the Reserve Bank of India, which uplifted the business restrictions on ECL Finance Ltd. and Edelweiss Asset Reconstruction Co.

Over the past few years, Edelweiss has "pivoted from being a conglomerate with a credit-heavy composite to a true investment company," Shah said. Edelweiss has three clusters—insurance, asset management, and credit.

"We expect the insurance business to break even in the next 18 months," Shah said. He, however, pointed out that the availability of cash as a whole has been shrinking for the insurance sector. "Earlier banks used to invest, but now they are pulling back."

If the insurance sector is opened for global players to invest up to 100%, "then it will increase the availability of capital," Shah said. His remarks come days after the Ministry of Finance proposed to raise the foreign direct investment cap in the insurance sector from 74% to 100%. The Department of Financial Services on Nov. 28 invited public comments on the proposed amendments.

The Edelweiss Group chief, during the conversation, also highlighted the "healthy mix" of global and domestic clients in its alternative asset management business. The total assets under management have crossed the Rs 50,000 crore mark, he said.

India's economic growth, liquidity condition, and the RBI's interest rate decisions will be among the top macroeconomic factors under focus in the first six months of 2025, Shah said.

In addition, Edelweiss will also keep a keen tab on the impact of trade tariffs promised by US President-elect Donald Trump. The implications of the tariff on the long-term US outlook, as well as on India, will be looked upon, he said during a conversation with NDTV Profit.

Despite the macroeconomic factors being in focus, Shah stressed that three-fourths of a company's performance is driven by "decisions taken at the micro-level." These micro-level decisions include formulating a distribution strategy, building more products, adding customers, and focusing on value addition.

"Global factors, or macroeconomic factors, should be 20-25% of the overall outlook, but we should not overthink them. Around 75% of what you achieve is at the micro-level," he said.

India's growth story offers a solid opportunity for businesses to scale operations, Shah said. "If you want to really build a business, the next 20-25 years in India offer a sweet period."