Nuvama Stake Sale: PAG Eyes New Buyers At Significant Discount As Ongoing Talks Fail

Asian investment firm PAG is said to be on the lookout for new buyers to take over its controlling stake in Nuvama Wealth Management Ltd. as talks with current bidders fell through.

The Blackstone-backed private equity firm is looking for a deal worth over Rs 4,000 crore for its 54.74% stake in Nuvama. Though the ask is at a significant discount to the market value of the stake, current bidders like Permira & CVC Capital are still not ready to meet the demand, a person aware of the matter told NDTV Profit.

No binding bids have been submitted by any party and a few bidders have thus backed out since they are not interested in the deal anymore, another person explained on the condition of anonymity.

In 2021, PAG had acquired 61.5% stake in Nuvama — which was called Edelweiss Wealth Management back then — for Rs 2,366 crore. At current market pricing, the Asia-focused firm's stake is worth over Rs 12,000 crore.

To be clear, any deal involving a change of control will trigger an open offer for 26% of shares held by minority shareholders.

While talks with prospective bidders have stalled, PAG is said to be looking for more international buyers to pick up its stake in order to find a higher quotation than the ones it currently has, a financial advisors working on the deal said.

Since no decision has been finalised by any party, the deal can go in any direction, all three of the abovementioned people said.

NDTV Profit has reached out to all the firms mentioned in the story for their comments.

Nuvama Wealth's association with Jane Street Group is unlikely to have impacted any timeline for closing the deal, since it was already being pitched at a steep discount, one of the abovementioned people explained.

Nuvama has recently been in the news over its association with Jane Street Group. NDTV Profit had earlier reported that Jane Street and its entities were the client of Nuvama, and operated through the broking arm of the domestic capital market firm.

In July, income tax officials conducted a survey at Nuvama's office in Mumbai's business district of Bandra-Kurla Complex, and sources indicated that this was linked to an ongoing investigation into Jane Street's market manipulation.

Jane Street could contribute up to 20% of Nuvama's asset service business, according to a July note by analysts at Jefferies. The note anticipated an impact of as much as 8% on Nuvama’s earnings due to the regulatory crackdown.