Is IIFL planning to sell portion of its stake in IIFL Wealth Management?

Is IIFL planning to sell a portion of its stake in IIFL Wealth Management, its private wealth business? The rumour doing rounds is that IIFL Wealth, which manages money for the rich, may either opt for an initial public offering (IPO) over the next one year or sell a minority stake to private equity investors. IIFL Wealth is said to be managing assets in the range of Rs 75,000 – 80,000 crore, valuing the business at Rs 3,750-4,000 crore. IIFL holds over 76.7% in IIFL Wealth Management; the remaining 23% is held by key employees of IIFL Wealth.

The equity stake dilution, according to market sources, is intended to give an ‘exit route' to some of IIFL Wealth employees. IIFL Wealth officials, when contacted, denied any immediate IPO plans. "We're here for the long haul. Why should we ask for an exit route now?" a senior IIFL Wealth spokesperson said. "An IPO is out of question as we're currently phasing through the Fairfax open offer. With regards to selling stakes to a PE player, we've not signed a binding termsheet with any PE investor. But on a normal course, we keep talking to a lot of PE players in nonbinding terms," the official said. IIFL shares have appreciated nearly 4% to Rs 193 apiece in the past one month.