The Edelweiss Group on Wednesday announced the acquisition of Religare Enterprises Ltd’s securities business, which includes securities and commodities broking, and depository participant services.
As part of the deal, Edelweiss Wealth Management will take on pan-India distribution of around 1,250 points of presence, including over 90 branches, over 1 million clients and the employees of Religare.
Edelweiss Wealth Management had acquired Rooshnil Securities in 2001 and Anagram Capital Ltd in 2010.
Nitin Jain, CEO, global wealth and asset management, Edelweiss Group, said, “The favourable macroeconomic environment, supported by the growing financialization of savings and rising affluence, has favourably impacted our wealth management business that has seen over 70% growth over the last fiscal.”
Rahul Jain, head of personal wealth advisory, Edelweiss Global Wealth Management, said the acquisition will expand the firm’s geographical reach and distribution footprint and triple its client base.
“Wealth management is the fastest growing segment in the industry right now fuelled by financialization, demonetization. We were looking at either acquiring large number of clients or increasing our distribution reach through opening branches and hiring employees. The idea was to achieve scale,” he said.
Religare Securities has a fairly similar set of clients and overall structure of the business is same, Jain added. “We will be able to leverage that with our product expertise and platform,” he said.
The transaction will take another two to three months to close.
“We are currently managing assets worth Rs76,000 crore and with the acquisition our AUM (assets under management) will reach Rs1 lakh crore. We expect the combined entity to grow by at least 25-30% next year,” said Jain.
“We have had interest from many potential suitors for this business and chose Edelweiss because in addition to having the product palette most suitable for our existing clients and partners, they were keen on retaining Religare’s workforce in its entirety, and this was one of our biggest priorities,” said S. Lakshminarayanan, executive chairman, Religare Enterprises Ltd.
On Wednesday, shares of Edelweiss Financial Services rose 1.24% to close at Rs294.85 on BSE, while Religare Enterprises’ scrip closed 4.5% higher at Rs73.15. The Sensex closed 0.18% lower at 33,777.38 points.