Edelweiss Financial Services shares trade ex-spin off; stock rises 5%

Shares of Edelweiss Financial Services on Friday traded ex-date for the demerger of wealth management business. Friday was also the record date for the purpose of determining the shareholders of Edelweiss Financial Services, who would be allotted equity shares by Nuvama Wealth Management pursuant to the scheme of arrangement.

The effective date of the scheme as notified to the exchanges was May 18. This has paved the way for the listing of Nuvama Wealth Management. As per the arrangement , Nuvama will allot 1,05,28,746 equity shares of the face value of Rs. 10 each to the shareholders of Edelweiss Financial Services on proportionate basis as a consideration for demerger. After listing, the shareholders of Edelweiss Financial Services would hold 30 per cent of the paid‐share capital of Nuvama Wealth Management.

In a filing to May 18, Edelweiss said: "This brings Edelweiss closer to the stated objective of value unlocking, thereby providing shareholders an opportunity to directly participate in Nuvama’s growth journey in addition to EFSL’s journey."

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Following the development, the stock (ex-spin off) traded at Rs 41.37 a piece on BSE, up 5 per cent over its adjusted price of Rs 39.40 for Thursday. The stock, on the other hand, was down 37.86 per cent over its unadjusted price of Rs 66.59 per share for Thursday.

In a presentation last week, Edelweiss Financial Services said Nuvama Wealth Management is now an independent business with a focused strategy and the flexibility to attract business-specific partners and investors

For shareholders, Edelweiss said it would be an opportunity for direct participation in Nuvama’s growth journey in addition to Edelweiss Financial Services' journey.

For Edelweiss, the move is seen enabling strategic alignment towards creating and unlocking value. It is also seen providing capital to Edelweiss Financial Services for future investments.

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