Foundation of Edelweiss as an Investment Bank.

Since our organisation’s foundation in 1996, we have endeavoured to build a great organisation. To help achieve this, we developed a set of Guiding Principles that defined our core values and beliefs and our method of doing business. These foundations also helped build a culture of ownership, a common purpose and shared values within Edelweiss. We started with a capital of Rs. 10 million, which allowed us to obtain a merchant banking license. The license amount, however, changed to Rs. 50 million just before the company was incorporated. This was our first exposure to regulatory upheaval and the first of the setbacks that we experienced in our journey. But we believed in finding opportunity amidst adversity and treating every setback as a hidden opportunity. So we started helping start-up companies raise funds via the non-IPO route, tapping, Venture Capital (VC) and Private Equity Funds (PE), which was a rarity in India at that time.

Expanded into Capital Markets and Broking business.

In 2000, we had our first blockbuster year of financial performance. We had also begun to feel the need for some stability in earnings and to go back to looking seriously at “adjacent markets.” We started considering a foray into the Broking business. In the same year, we also raised our first round of outside capital. In 2001, the markets and economy sank and business slowed down, accompanied by the bursting of the Internet bubble. But this didn’t deter us from setting targets for ourselves. We stood by our rationale - “One should never waste a crisis”. We set about making the optimum use of this downturn – our human capital increased from 10 people in March 2000 to nearly 100 in March 2004, and we had a new 5000 sq. ft. office. During this phase, we also started exploring new, innovative business lines, which were in their nascent stages in the country.

Set up our Corporate credit business.

This phase of our evolution we like to call “Joyful Hypergrowth” at Edelweiss, because we were expanding rapidly. By 2006, we had witnessed two significant rounds of capital raises. The focus on people, capital and ideas continued and the pace of expansion was exhilarating. This was also a phase of serious introspection, wherein we conceived the 10x10 strategy - we aimed to grow 10x times in 10 years. We began to actually explore evaluating the credit business, which culminated in setting up a leadership team in 2007. Realising the need for capital to drive this credit business, we strengthened our investor base by raising more capital. An IPO was a natural follow-up to this and we went public in 2007. Hereon, our objective was to stretch, soar and test our limits and see where we land.

Built our Retail platform – Retail Mortgage, Life Insurance, Asset Management, Wealth Management.

From 2008 onwards, dynamics at Edelweiss were very different. The reality of the global financial crisis had hit home hard. Our credit business was still nascent, our foray into retail capital markets was all too-new and our dependence on wholesale capital markets all too apparent. While this stage of our journey was the most demanding and punishing phase of our journey, we truly laid the foundation of growth that was to follow. All our significant businesses today were seeded and nurtured then and right through 2012 and beyond. We became the 24th life insurance company in a joint venture with Tokio Marine. On the capital markets side, we began a Global Wealth practice. We now had our own Business Solutions Group; we built a strong risk and governance team; we formally set up EdelGive in 2008. The challenges faced in this period helped us realise our core competence and understand the importance of diversification.

Diversification benefits start to kick in.

Synergistic diversification in the previous phase helped us to reduce our dependence on the capital markets and create a strong and sustainable revenue line going forward. Between 2012 and 2016, we focused on true diversification, with the aim of achieving what we would like to call balanced growth. We strengthened our businesses, simultaneously working to de-risk them to enhance sustainability. At the same time, we decentralised our businesses whilst creating strong governance and risk management structures both at the Edelweiss level and at the business group level. The focused consolidation efforts in the previous phase have borne tangible results in this period with profit having largely witnessed a steady uptick. Particularly, the focus on seeding new businesses and gradually scaling up the mature ones has helped us create a stream of businesses that are ready to take advantage of the India growth story that we believe is going to unfold over the coming decade.

Poised to scale with help from macro - economic tailwinds.

As of 2018 Edelweiss has completed two years of the 6th phase of its journey called 'Gaining Scale'. The last phase was a period of mature and balanced growth for Edelweiss. As we seeded and built businesses ground up, we focused on establishing strong foundations in these businesses through investments which could generate benefits for the long-term. In the preceding 6-8 years, we have started a variety of new businesses including Retail finance, Asset and Wealth management, Agri-credit and Life Insurance amongst others. Some of these businesses were what are, in common parlance, called J-curves. While the gestation period in such businesses is long, the asymmetric pay-off that we earn once these businesses mature provides a sufficiently high return to justify the initial negative returns. The defining feature of the current phase would be a disproportionate and exponential growth in scale, as the platform matures for each of these businesses.