Blackstone to acquire 16% stake in IIFL Finance as NBFC announces Rs 6,414 crore capital raise led by global investor

IIFL Finance announced on Tuesday that it is set to raise Rs 6,414 crore ($686 million) in one of the largest primary private equity investments in a listed Indian non-banking financial company (NBFC), with global investment firm Blackstone leading the funding round alongside the company's promoters.

Blackstone will invest Rs 5,000 crore ($535 million) in IIFL Finance for an approximately 16% stake on a fully diluted basis.

Meanwhile, the company's co-promoters, Nirmal Jain and R. Venkataraman, will invest Rs 1,264 crore ($135 million) through warrants, and Anchorage Capital will also participate in the transaction with a primary equity investment of Rs 150 crore ($16 million).


Under the proposed arrangement, funds managed by Blackstone Private Equity will subscribe to compulsorily convertible preference shares (CCPS) worth Rs 5,000 crore, IIFL Finance said in an exchange filing.

These securities will convert into equity shares at Rs 602 apiece, in line with the applicable regulatory pricing requirements, within 18 months of allotment.

Commenting on the investment, IIFL Finance founder and Managing Director Nirmal Jain said the partnership reflected Blackstone's confidence in the lending platform and the opportunity to expand access to formal, secured credit among underserved households and small businesses in India.

"The investment strengthens our balance sheet and gives us the headroom to scale our franchises, invest further in technology, and deepen our co-lending partnerships with banks, while staying disciplined on risk and capital," he said.

Meanwhile, Blackstone's Chief Investment Officer for India Private Equity and Senior Managing Director, Mukesh Mehta, described IIFL Finance as a leading retail lending platform with an established franchise and a commitment to serving underserved customers.

"Building great businesses has been central to our approach over more than two decades of investing in India, and we look forward to partnering with Nirmal, Venkat and the management team to support IIFL Finance’s continued growth," he added.

IIFL Finance shares ended Tuesday's trading session at Rs 627 on the NSE, down 0.44% from the previous close of Rs 629.75, ahead of the company's announcement of a Rs 6,414-crore capital raise.