The credit rating agency has also reaffirmed the rating on the existing debt instruments of the company.

CRISIL said that the ratings continue to reflect the adequate capitalisation of the Edelweiss group, supported by multiple rounds of capital raising; its diversified business profile, with presence across lending, asset management, asset reconstruction and insurance segments; and demonstrated ability to build competitive presence in multiple lines of businesses, which should also support improvement in earnings going ahead. The group also maintains adequate liquidity on an ongoing basis.

The continuation of the ‘negative' outlook reflects the challenges that group is facing in profitability and asset quality on account of its wholesale lending book. Although profitability has seen some improvement and the group is also taking concerted efforts to arrest asset quality stress, improvement in profitability and asset quality will be a key monitorable over the medium term.

"Improvement in asset quality and profitability coupled with recoveries from wholesale exposure will be key rating monitorables,” CRISIL said in a statement.

Edelweiss Financial Services, on standalone basis, is primarily engaged in investment banking services and provides development, managerial and financial support to group entities.

As on 30 September 2022, the company's PAT was Rs 112 crore on total income of Rs 2,121 crore, as against Rs 90.6 crore on Rs 1,951 crore a year earlier.

The scrip added 0.75% to end at Rs 67 on the BSE yesterday.