Edelweiss stock extends gain for fifth day in a row, locked at upper circuit; here are the likely triggers for rally

Edelweiss may seek a valuation of $700 million to $800 million for the entire mutual fund business, Bloomberg reported citing sources. The report said that Edelweiss is exploring a sale of a 25% to 35% stake in the unit.

“To further strengthen our international business, we are open to exploring opportunities with minority strategic partners, ensuring there is a strong alignment in values and vision,” Radhika Gupta, a managing director and chief executive officer of Edelweiss Mutual Fund, had said in response to a query from Bloomberg News.

Edelweiss offers a wide range of financial services including loans for individuals and companies, asset management and insurance, according to its website. Edelweiss’s mutual funds business had around Rs 1.42 lakh crore ($16.8 billion) in assets under management as of the end of October.

On November 27, Moneycontrol reported that Mumbai-based real estate firm Paradigm Realty has announced that it has pre-paid a debt of Rs 175 crore to Edelweiss Financial Services Ltd, two quarters early, which could have contributed to the stock's rally on Thursday.

According to a release, Edelweiss' internal rate of return for the debt instrument was in the range of 18-19 percent, with the debt including quarterly coupon payments that started from the third quarter after the initial funding. Paradigm said that the early exit to Edelweiss was made possible due to strong sales collections at 102 Downtown, as well as a refinancing exercise, in which the company raised Rs 135 crore in debt from a leading private lender.