EGW Capital (EGW) is now a known name in the blockchain and traditional investment banking space. The US-based financial conglomerate is working hard to establish itself as a leading brand when it comes to listings, fundraising, and market-making. The management is slowly moving towards high volume and highly profitable businesses like automated crypto market-making, crypto mining, and crypto listings. The company is eager to finance its business operations through the process of staking where they will allow investors to pool in their purchased EGW coins and earn a fixed return over them. They are more like fixed deposits but are of shorter tenure like 60,90,120 and 180 days. At the end of the staking program, the coins are bought back by the issuer or are sold in the open market to be purchased by the next entrant.
EGW Capital recently secured the US $10 million of financing for its crypto bonds but has requested the investors to move their capital in the staking pool where the returns can go as high as 29% per annum. The investors may move this capital by mid of November. This is, however, part of the bigger plan. EGW Capital is proposing to launch its massive US $100 million Initial Exchange Offering (IEO) but its dwindling coin price is causing a delay.
The whole idea of EGW Capital is to make people shift from the idea of traditional stock exchange listings to the new improved, modern, and technically advanced tokenized listings. The tokenized shares are traded on the crypto exchanges where the whole world can participate in the trading without facing legal obstacles, the settlement of trades happens instantly and the payout happens in Bitcoin, Ethereurm, and stable coins like USDT. Tokenization is being adopted in India at a massive pace, the businesses are realizing the importance of blockchain technology and how it can bring prosperity for them without compromising heavily on cost and conduct never-ending compliances.
As of now EGW Capital is providing market making to over 14 crypto exchanges and plays majorly in Ethereum and Bitcoin. The company is eager to expand beyond leading cryptocurrencies and provide support to the altcoins. The year 2020 was not an easy year for the company, they started strong by announcing several projects for the Indian market but faced one or other issue engineered by the Indian government. On March 5, 2020, the honorable Supreme Court lifted the ban on cryptocurrencies by allowing them people to freely buy, sell and trade crypto, but just 20 days after the good news, the world witnessed the massive lockdown which crippled the plans. The Indian economy is now losing steam, however, the business of the company is gaining traction as many investors wish to raise capital directly from the markets instead of relying on local bankers. Crypto listings are something which people are exploring and EGW Capital with its deep traditional banking roots can capture a large chunk of the market.
Within all these ups and downs, EGW coins (listed coins of EGW Capital) too witnessed a massive sell-off, the price tumbled from an all-time high of US $24.31 to an all-time low of US $5.55, a net fall of 77% from the all-time high. The price has however stabilized around the US $8 but that’s far from glory days. The market cap is currently hovering around US $900 million which once peaked over the US $3 billion.
The analyst argues that EGW Capital can command a higher valuation if it conducts more and more crypto listings which result in enhanced equity income. Whenever EGW Capital concludes a project it charges both equity and cash success fee. The equity fee can be as high as 5-20%, depending on how much capital the client is investing for the listing. In the case, of the sponsored listings, the equity fee is unimaginably high and extremely profitable for the company. The equity is then sold as per the requirements to sustain the business operations. To command, a valuation of more than the US $3 billion, the company has to earn over the US $270 million in equity every year, the number as of now is close to the US $33.61 million. The fair value of EGW Capital as per few conservative analysts is less than the US $600 million which is around the US $300 million less than the current market cap of the business.
Here are the EGW Capital Projects other than its IEO and crypto listing projects which will go on the floor in the year 2021:
- Crypto Banking App- EGW Capital is developing a financial application that will allow people to buy, sell, and trade their crypto. It will also allow people to stake their crypto and earn handsome returns over it. The crypto banking app will also launch use its own debit card which will allow people to spend in crypto.
- EGW Academy – This is the most anticipated project as it is targeting to set up an online university that will allow people to be certified in blockchain and crypto. Rahul Kumar, the CEO of EGW Capital will launch its much-delayed book “Revealing Blockchain” by November end this year. The students will pay in EGWA coins and at the end of the course, the coins will be credited back and can be sold to the next interested student who will be looking to pay his fee in coins.
- SPAC Acquisition – The company is proposing to launch its own crypto SPAC. This is clear that the company will utilize SPAC to conduct a US IPO for a blockchain company. As per the insiders, EGW Capital may acquire a medium-sized crypto exchange. Once this happens, the company can command complete control over the financial side of the blockchain space. Probably, the exchange will allow trading of both security tokens and utility tokens.
- Launch of Stable Coin (RZE) – EGW Capital will also list its stable US dollar-backed stable coin called Reserve USD (RZE) allowing people to invest in the crypto markets with the help of its stable coin.
- Blumium Ratings – This is a small scale project which will rate upcoming crypto projects and will provide instant crypto loans.
- Crypto Mining – EGW Capital will execute crypto mining in partnership with other companies where it will source the requisite funds. Wishmax Investech, Hong Kong is believed to be the partner for this venture.
- NeroChain Diversified Blockchain Fund – The US $100 million crypto blockchain fund will be listed onto the US markets. The fund will come into existence by acquiring an already listed company. EGW Capital will then file the fresh prospectus and will proceed with the underwriting.
Possible Retail Listings of EGW Capital Projects:
- Blumium Ratings
- EGW Academy
- NeroChain
As per the research analysts, the upcoming IEO and the proper execution of the above-mentioned targets may help EGW Capital (EGW) coins to touch levels of US $34-45 per coin. Since the company is in the process of a forward split of 4:1, the price target has to be adjusted accordingly. The target price may take the valuation of the business to more than the US $5 billion but it all depends on the availability of investment capital and effective senior management.
