By Nesil Staney
PAG, a global alternative investment firm with over $55-billion assets, is the biggest causality of Sebi’s curb on Jane Street (JS) as its exit valuations get heavily impacted, said investment bankers and brokers.
Major private equity firms, including CVC, Permira, EQT and Warburg Pincus, which entered the bidding late, are in fray to purchase PAG’s stake in Nuvama, with advisors JP Morgan and Morgan Stanley working on valuations estimated at $1.6 billion.
Nikhil Srivastava, now a partner at PAG after nearly a decade with KKR, was instrumental in the acquisition and public listing of Nuvama Wealth (formerly Edelweiss Wealth). The JS interim order and impound from Sebi for manipulations has created a nightmare for Srivastava and PAG’s sale advisors, said sources. Additionally, Nuvama is under the regulator’s lens for its role as the India brokerage and compliance partner of Jane Street.
Jefferies issued a detailed report on Nuvama Wealth’s JS impact which includes client exposure and revenue within its asset services and institutional equities (IE) segments. Jefferies estimates that 15–20% of Nuvama’s asset services and IE revenues could be linked to JS. This translates to a 7–8% hit to earnings for Nuvama, it said.
Nuvama’s shares plunged 11% on Friday and rebounded 3.2% Monday to around Rs 7,500.
PAG holds a controlling (54.78%) stake in Nuvama, whose shares are trading at 7.71 times its book value. Jefferies notes there is unlikely to be any counterparty risk related to JS’ contracts, as trades are guaranteed by clearing corporations and JS. Nuvama is part of the BSE 500 and Nifty 500 indices.