Edelweiss Financial Services said that the Edelweiss Group has divested its majority stake in Edelweiss Gallagher Insurance Brokers (EGIBL), post approval from the Insurance Regulatory and Development Authority of India (IRDAI).
In first tranche, Edelweiss has transferred 61% stake in EGIBL to Arthur J. Gallagher & Co. (AJG). AJG now owns 91% of EGIBL, as a result of which EGIBL has ceased to be the subsidiary of the company.
The business will transition to the Gallagher brand in the coming months. Edelweiss Group will focus on growing its life and nonlife insurance businesses, which have been among the fastest growing in the industry.
Gallagher and Edelweiss had announced the transaction in July 2021, cementing a partnership that was forged between the two in May 2019, giving clients access to a larger suite of insurance products and services and scaling up the business significantly.
Rashesh Shah, Chairman, Edelweiss Group said At Edelweiss, we have always been driven by long-term value creation, seeding, nurturing businesses, forging partnerships at the opportune time to build scale. We have enjoyed an excellent relationship with the Gallagher team and we believe that they will add lot more value to the business and give it a global edge.
This move also brings to us the flexibility to reallocate capital, which post this transaction and the strategic partnership in our Wealth Business, is ample. We now have adequate capital and a stronger balance sheet and look forward to scaling up our fast-growing life and non-life insurance businesses, as India turns a corner post the pandemic, he added.
The Edelweiss Group is a diversified financial services companies, providing a broad range of financial products and services. Its businesses include asset management, NBFC, housing finance, asset reconstruction, wealth management, life insurance, general insurance and insurance broking.
The company reported a consolidated net profit of Rs 18.09 crore in Q1 FY22 as against a net loss of Rs 245.08 crore in Q1 FY21. Sales declined 13.83% to Rs 1625.53 crore in the quarter ended June 2021 as against Rs 1886.46 crore during the previous quarter ended June 2020.
The scrip advanced 0.86% to currently trade at Rs 81.70 on the BSE.
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