MUMBAI: In what could signal a growing interest of foreign investors in Indian stressed assets, three funds are in a race to pick about 30% stake in Edelweiss Asset Restructuring Company (ARC) for anywhere around Rs 1,600 crore, or $250 million, according to two people close to the development.
The buyers — a Canadian pension fund, a Scandinavian fund and a Korean fund — are in talks with Edelweiss ARC. Edelweiss is negotiating with all the three funds, said a person in the know. However, another person said the Canadian Pension fund is at an advanced stage of negotiations.
“Talks are at an advanced stage between the Canadian Pension Fund and Edelweiss ARC. The fund could buy anywhere around 25 per cent to 30 per cent in Edelweiss ARC and pay between $200 million and $250 million depending on the final valuation,” a person with direct knowledge of the matter told ET.
This would mean Edelweiss ARC could be valued at anywhere between $660 million and $1 billion, depending on how the negotiations shape up. Edelweiss is looking for a valuation close to the $1 billion-mark for its ARC business, but the buyers are bargaining for a lower price tag, the person said.
ET could not independently verify the names of the Scandinavian and Korean funds. For the Canadian fund — Caisse de depot et placement du Quebec (CDPQ) — this would be the first investment in India. The pension fund, which is the second largest pension fund in Canada, had opened an office in India in 2015.
People in the know said that CDPQ is also looking to directly invest in Indian companies, especially in the infrastructure space. Responding to an email query from ET on the stake sale, a spokesperson for Edelweiss said, “While Edelweiss is continuously evaluating opportunities that make business sense we cannot comment on market speculation.” An email sent to CDPQ did not elicit any response till press time.
According to industry estimates, Edelweiss ARC is the biggest player in the space and currently holds around 40 per cent market share in the ARC business. In March this year, Siby Antony, CEO, Edelweiss ARC, had told PTI that Edelweiss was looking to raise funds and was also approached by some funds.
“So far, we could manage with the support from our parent Edelweiss Group. But with a lot of assets likely to come in the market after Reserve Bank’s asset quality review exercise, we will need to raise funds,” said Antony.
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Source: Economic Times
