Fairfax India to raise stake in IIFL Capital to 51% with $211 million investment

Kolkata : Billionaire Prem Watsa's Fairfax India has finalised a Rs 2000 crore investment in IIFL Capital Services to become a majority shareholder with at least 51% ownership.

The capital infusion will be done through preferential allotment at Rs 350 per share, IIFL capital announced Thursday. This will trigger an open offer as per market regulation.

"The company is well positioned for the future as it expands its wealth and asset management services offerings, while maintaining its leading position in retail broking and financial services,” Watsa was quoted as saying in a press statement issued by IIFL Capital.


Fairfax India Holdings Corporation will make the investment through its wholly owned subsidiary FIH Mauritius Investments.

"It will be done through a combination of transactions including a preferential allotment of equity shares, an open offer, and arrangements with the existing promoters, such that its stake in the company increases to a minimum of 51%," IIFL Capital said.

ET wrote about this potential investment in its edition dated April 22.

Following the closure of the transaction, Fairfax India and its affiliate HWIC Asia Fund Class A will join the existing promoter group alongside Nirmal Jain and R Venkataraman.

At present, the Canada-headquartered group is the second-largest shareholder in IIFL Capital with a 27.18% stake held through FIH Mauritius Investments.

Existing promoters held 30.87% at the end of March with founder Nirmal Jain and his wife Madhu Jain together holding 18.88%.

“Fairfax India has been a trusted long-term partner of the IIFL Group for over 15 years, and together we have created significant value for all stakeholders," Jain said.

The fresh capital infusion is expected to strengthen the company’s balance sheet and support the next phase of growth across its capital markets, wealth management, asset management, institutional equities, investment banking and related financial services businesses.

The proposed transaction remains subject to customary regulatory, and shareholder approvals, including applicable open offer requirements under market regulations. To be sure, FIH Mauritius will have the right to nominate two directors on the board of IIFL Capital.

The share of IIFL Capital jumped 6% Thursday to Rs 351.30 on BSE.