Shares of Edelweiss Financial Services zoomed 19 per cent to Rs 60.65 on the BSE in Thursday’s intra-day trade on the back of heavy volumes. The stock of the financial services company rebound sharply (21 per cent) from its 52-week low of Rs 50.10 touched in intra-day deal today.
At 02:09 pm; the stock traded 16 per cent higher at Rs 59.25, as compared to a 0.3 per cent decline in the S&P BSE Sensex. A combined 37.98 million equity shares representing 4 per cent of total equity of Edelweiss Financial changed hands on the NSE and BSE. The names of the buyers and sellers were not ascertained immediately.
Ace investor Rakesh Jhunjhunwala held 15.12 million equity shares or 1.6 per cent stake in Edelweiss Financial at the end of December 2021 quarter, the shareholding pattern data shows.
The stock has underperformed the market by falling 18 per cent in the past three months, as compared to a 0.48 per cent rise in the S&P BSE Sensex. In the last six months, the stock has slipped 25 per cent, as against a 1 per cent decline on the benchmark index. It had hit a 52-week high of Rs 101 on July 14, 2021 and a record high of Rs 342 on May 29, 2018.
On March 4, 2022, the rating agency CRISIL Ratings reaffirmed its rating on the retail bonds, long-term debt instruments and bank facilities of Edelweiss Financial to ‘CRISIL AA-/CRISIL PP-MLD AA-r/Negative/CRISIL A1+’.
The ratings continue to reflect the adequate capitalisation level of the group, supported by multiple rounds of capital raising; the diversified business profile with presence across lending, asset management, wealth management, broking, asset reconstruction and insurance segments; and demonstrated ability to build significant presence in multiple lines of business, which should continue to support earnings. The group also maintains adequate liquidity on an ongoing basis, CRISIL said in its rating rationale.
The continuation of the ‘Negative’ outlook reflects the challenges in profitability and asset quality that the group has been facing largely on account of stress on its wholesale lending book. The retail lending book was also impacted amid the Covid-19 pandemic. Trends in profitability and asset quality, over the medium term, will be key monitorables, the rating agency said.