Edelweiss is not winding down its entire loan book but it is surely winding down its whole-sale loan book to zero over the next two years. After posting a record Rs.2245 loss in FY20 due to heavy COVID provisioning, Edelweiss plans to turn asset-light in fiscal 2021. Edelweiss has already reduced its wholesale loan book by 43% since the IL&FS crisis in 2018.

Due to the tightness in the credit markets, Edelweiss will be completely exiting the wholesale credit business by FY22 and will focus solely on retail credit. Of course its profitable AMC and wealth business will continue with greater focus. In FY20, Edelweiss also saw its revenues fall by 20% as it cut down on its wholesale credit book.

Another business where Edelweiss will continue to focus is the asset reconstruction business. Edelweiss is already the largest player in the ARC business with Rs.800 crore annual billing. Its ARC AUM stands at Rs.43,188 crore. It has had a good track record of collections in the ARC business and that will continue to be a major focus area.