CDPQ to invest over INR 1800 crores in Edelweiss NBFC
Edelweiss Group announced that CDPQ Private Equity Asia Pte. Ltd., a wholly owned subsidiary of Caisse de dépôt et placement du Québec (“CDPQ”), one of North America’s largest pension fund managers, has signed an agreement to invest over INR 1800 crores (~US$250 million) in ECL Finance Limited (“ECL Finance”), the non-banking financial company (NBFC) arm of Edelweiss Group. The planned investment by CDPQ would contribute towards establishing a large and diversified credit platform in India. This proposed investment will close after customary regulatory approvals.
Edelweiss Group has built a significant competitive position across businesses including the Credit segment. With a credit book of around INR 30,000 crores (~US$4.2 billion) (Q3FY19) that is spread across wholesale and retail finance segments, the business has both robust size and scalability. The agreement with CDPQ will enable ECL Finance to capitalize on opportunities in the credit market and confirm the capability of the Group to capture opportunities in the NBFC space. It provides thrust to the business for technology and digital investments. This investment also ensures that ECL Finance has the requisite resources to maintain strong organic growth, as well as take advantage of any market consolidation opportunities. Speaking on the development, Rashesh Shah, Chairman and CEO of Edelweiss Group said, “Credit penetration in India will be the key to advancing India’s economic gains, driven by the long-term trends in democratisation of credit, rising household incomes and increased consumption. I expect this partnership to deliver tremendous value towards deepening the market and we are encouraged by this investment by CDPQ to partner with us on this journey”.
Michael Sabia, President and Chief Executive Officer at Caisse de depot et placement du Quebec, stated, “We are glad to strengthen and expand our partnership with Edelweiss Group, with whom we share a common mindset and who has one of the most innovative credit investing platforms in India. This new investment capitalizes on solid growth in the financing demand from SMEs and residential sectors, both of which being key drivers in sustaining India’s future growth”.