IIFL Finance to raise Rs 6,414 crore through preferential issue; Blackstone to invest Rs 5,000 crore

IIFL Finance on Tuesday approved a Rs 6,414.20 crore primary capital raise through a preferential issue, with global alternative asset manager Blackstone leading the investment with a Rs 5,000 crore infusion for an approximately 16% stake in the company on a fully diluted basis.

The company's promoters, Nirmal Jain and R Venkataraman, will collectively invest Rs 1,264.20 crore through warrants, while Anchorage Capital will participate in the transaction with a Rs 150 crore primary equity investment.

The board of directors, at its meeting held on November 10, approved the issuance of 8.55 crore compulsorily convertible preference shares (CCPS) and 2.10 crore warrants on a preferential basis through private placement, subject to shareholder and applicable regulatory approvals.


Funds managed by Blackstone Private Equity will subscribe to 8,30,56,478 CCPS for Rs 5,000 crore. The preference shares will be issued at Rs 602 apiece and converted into equity shares at the same price within 18 months of allotment, in line with the regulatory pricing.

Anchorage Capital will subscribe to 24,91,695 CCPS through two of its investment schemes for a combined consideration of Rs 150 crore.

The promoters will subscribe to 2.10 crore warrants at Rs 602 apiece. Jain will invest Rs 903 crore through 1.50 crore warrants, while Venkataraman will invest Rs 270.90 crore through 45 lakh warrants. Ardent Impex Private Limited, a promoter entity, will subscribe to the remaining 15 lakh warrants for Rs 90.30 crore.

The entire investment will be infused as primary capital into IIFL Finance, strengthening its balance sheet and providing additional capital to support its next phase of growth.

The company expects the capital infusion to increase its capital adequacy ratio from around 17% to approximately 30% on a pro forma basis as of September 2026. The stronger capital position is also expected to support an improvement in its credit ratings and lower borrowing costs over time.

IIFL Finance plans to use the additional capital to accelerate growth across its secured lending businesses, particularly its gold finance business, while expanding its retail lending franchise.

The company said the partnership would also provide access to Blackstone's global scale, network and operational expertise, including capabilities in technology, data and artificial intelligence (AI). These resources are expected to help the lender scale its secured lending businesses, attract and retain talent and strengthen its overall franchise.

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The proposed appointment of Blackstone representatives to the company's board is also expected to strengthen governance standards and oversight while preserving IIFL Finance's entrepreneurial culture and execution focus.

"We are delighted to welcome Blackstone as a partner in IIFL Finance. Their investment is a strong endorsement of the franchise our team has built, and of the opportunity to bring formal, secured credit to millions of underserved households and small businesses across India," said Nirmal Jain, founder and managing director of IIFL Finance.

Jain said he and Venkataraman were investing Rs 1,264 crore alongside Blackstone, reflecting their conviction in the company's next phase of growth.

"This partnership is about more than capital. Blackstone brings deep experience in building market-leading businesses in India, strong governance discipline, and a global perspective. 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 added.

Mukesh Mehta, chief investment officer for India Private Equity and senior managing director at Blackstone, said the firm was pleased to invest in IIFL Finance, describing it as a leading retail lending platform in India with a strong franchise and commitment to serving underserved customers.

The board has also approved an increase in the company's authorised share capital from Rs 971.05 crore to Rs 5,621.05 crore, subject to shareholder approval and other applicable regulatory clearances.

As part of the revision, the authorised preference share capital will be increased to accommodate 8,55,48,173 preference shares with a face value of Rs 602 each, while the authorised equity share capital will remain unchanged.

The transaction is subject to customary regulatory and shareholder approvals.

Trilegal is acting as legal counsel to IIFL Finance, while Khaitan & Co is advising Blackstone.

IIFL Finance shares ended Monday's trading session, November 9, at Rs 626.65 on the BSE, down 0.45% from the previous close of Rs 629.50. The company had a market capitalisation of Rs 26,746.17 crore at the close of trading.

Disclosure: This article has been written by Kumar Gaurav, who is not a Sebi-registered Research Analyst or an Investment Adviser. Gaurav and their ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective Sebi-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here