The Family Office Co. announces Edelweiss' exit investment in India

The IPO of Edelweiss has closed on the 20th of November and has received a large amount of interest. Given the current jitters in global financial markets, it may not seem like the best time to bring a company involved in brokerage and investment banking to market, but in fact, relative to its size, the IPO of Edelweiss Capital turned out to be one if the "hottest" offerings in India so far this year, as reported by FinanceAsia.

Edelweiss offered 8.39 million shares through its IPO, with bids for 930 million shares received. The price range of Edelweiss' equity shares is expected to be between INR725 ($18) to INR825 ($21). Citi, Kotak and Lehman Brothers were the joint book runners.

Founded in 1996 by former ICICI Bank executives Rashesh Shah and Venkat Ramaswamy as a boutique investment bank based in Mumbai, India, Edelweiss Capital has growth significantly and, in addition to its institutional and private client brokerage and investment banking business, the company is now also involved in proprietary trading and treasury operations, asset and wealth management, insurance broking and wholesale financing.

Apart from the general interests in emerging Asian capital markets, investors are bidding for Edelweiss shares because the range of businesses the company offers is unique and no other listed financial services company in India can provide the same exposure.

Edelweiss also has a strong track record of high profitability and growth with both revenues and net profits increasing at a compound annual growth rate of about 120% between fiscal 2005 (to end March) and 2007. It posted a net profit of Rs1.09bn in fiscal 2007 and in the five months to August 2007 the bottom line it had already reached Rs809m. The analysts forecast that the bottom line will continue to expand at 60% to 70% in fiscal 2008 and 2009.

This healthy demand for Edelweiss' shares may be a reflection of the fact that the Indian stock market has held up better than many other Asian markets in the recent downturn, but it could also be a vote of confidence in the longer-term performance of the market.

In October 2005, Greater Pacific Capital, a global public-private equity fund founded by former Goldman Sachs executives, bought an initial 20% stake in Edelweiss.

The Family Office Co. BSC(c) underwrote the transaction and acted as a special advisor. The Family Office executed a partial exit at the end of 2006 while retaining a portion of the investment with the expectation of significant upside potential in the company's future valuation via an IPO.

The Family Office is an independent wealth management company focused on offering investment management services and independent strategic financial advice to its clients. Based in Bahrain, and with an office in London, The Family Office is licensed and regulated by the Central Bank of Bahrain and the FSA.