Shares of Edelweiss Financial Services dropped close to 7% to hit an intraday low of ₹59 at market open on Friday.

What Happened: As per media reports, the company’s premises were searched by the Income Tax Department on Thursday. The raids are said to have been ongoing since Thursday morning in connection to alleged tax evasion.

This is not the first time that the group has come under fire from regulatory bodies, as in 2020, the Enforcement Directorate reportedly called the company’s top management in connection to alleged Forex smuggling of ₹2,000 crore.

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However, currently, there is not much information about the current raid. The company is also yet to address the topic.

The move can be linked to the IT Department’s broader crackdown on Asset Reconstruction Companies. In December 2021, the department had conducted searches at the premises of four ARCs — Omkara ARC, Rare ARC, CFM ARC, and Invent ARC.

Price Action: Shares of Edelweiss Financial Services recovered after the initial drop to trade 1.10% lower at ₹62.75.

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