Edelweiss Finance & Investments Ltd. (EFIL) is a part of the Edelweiss group, which is one of India's diversified financial service conglomerate offering credit, wealth, asset management, asset reconstruction and capital market advisory services and life and general insurance. The Company is presently engaged in the business of granting loans against securities, margin trade financing and IPO financing. It intends to grow into a leading NBFC of the Edelweiss group's advisory business. The Edelweiss group's advisory business presently includes wealth management, asset management, asset reconstruction and capital markets. EFIL's product portfolio currently comprises of granting loans against securities, margin trade financing and IPO financing. It provides loans to its customers against the pledge of certain specified securities held by such customers. The product is offered to customers who require liquidity against their investments in certain specific marketable securities including equity shares, units of mutual funds, bonds, debentures and structured products. The tenure of such loans may be up to 30 months. Edelweiss group enjoys a large client base of over 1,250,000 clients across its various businesses, as at September 30, 2019. The Edelweiss group had 467 offices being 459 offices across approximately 180 cities in India and eight offices outside India in six cities as at September 30, 2019. These resources are available to EFIL. For the last three fiscals, EFIL has posted total income/net profit of Rs 159.14 cr. / Rs 12.69 cr. (FY18) and Rs 142.46 cr. / Rs -(0.36) cr. (FY19). For H1 of FY20 it has posted net profit of Rs 17.09 cr. on total income of Rs 117.67 cr. Thus there has been inconsistency in its top and bottom lines. According to company, as on 30.09.19 it had no NPAs. As on 30.09.19 it's paid up equity capital of Rs 3.44 is supported by free reserves of Rs 198 cr. As on September 30, 2019 and March 31, 2019, EFIL's net worth was Rs 198.30 cr. and Rs 177.37 cr. respectively. Its current debt equity ratio of 6.25 will stand enhanced to 7.51 post this issue. This issue is rated CARE AA-/Stable (by CARE Ratings Limited) and CRISIL AA-/Stable by CRISIL. It indicates that instruments with this rating are considered to have the moderate degree of safety regarding timely servicing of financial obligations. Such instruments carry the moderate credit risk. Considering average rating, inconsistent financial performance and availability of other good debt offers, so we give NEUTRAL rating to debt issue.
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