Synopsis
Private equity giants and global investors, including HSBC, are vying for PAG’s controlling stake in Nuvama in a potential buyout deal estimated to be worth around $1.6 billion.
Shares of a company involved in broking and trading in equity securities, which is also registered as an Investment Adviser and Merchant Banker with SEBI, surged nearly 4.5 percent on BSE, after reports on private equity groups competing to acquire a stake in a potential buyout deal worth $1.6 billion.
With a market cap of Rs. 27,007 crores, the shares of Nuvama Wealth Management Limited closed in the green at Rs. 7,500.8 on BSE, up by around 3.3 percent, as against its previous closing price of Rs. 7,263.1. The stock has delivered positive returns of around 59 percent in one year, but has fallen by over 1.3 percent in the last one month.
What’s the News
Private equity giants—CVC Capital Partners, Permira and EQT—are in discussions with PAG, an Asia-Pacific-focused investment firm, to acquire its controlling stake in Nuvama Wealth Management Limited (formerly Edelweiss Wealth Management). According to multiple reports, the potential buyout deal is estimated to be worth around $1.6 billion.
Adding to the competition, HSBC and ChrysCapital are also in the same race. With five serious contenders vying for the deal, the bidding war is shaping up to be intensely competitive.
All five shortlisted bidders submitted non-binding offers toward the end of last month and are currently in the due diligence phase. While binding offers are expected by late July, some analysts feel this timeline might be a bit difficult to meet.
The promoterPAG currently owns a 54.78 percent stake in Nuvama. If the deal goes through and results in a change of control, it will trigger an open offer for 26 percent of shares held by minority shareholders, in line with regulatory requirements.
The deal discussions come at a time when Nuvama has been making headlines after SEBI barred US-based Jane Street from Indian markets, alleging the firm manipulated benchmark indices to reap substantial gains via derivatives. While SEBI’s 105-page interim order did not directly name Nuvama, the firm came under the spotlight due to its role as Jane Street’s local trading partner.
Financials & more
Nuvama Wealth reported a significant growth in its revenue from operations, showing a year-on-year rise of around 20 percent from Rs. 929 crores in Q4 FY24 to Rs. 1,120 crores in Q4 FY25. Similarly, its net profit increased during the same period from Rs. 181 crores to Rs. 255 crores, representing a growth of about 41 percent YoY.
Nuvama Wealth Management Limited is a SEBI-registered stock broking entity, merchant banker, and investment adviser. It provides wealth management, asset management, clearing services and custody services to its clients along with trading in securities and derivatives.
Written by Shivani Singh
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