IIFL Capital Shares Jump As Fairfax India Plans ₹2,000 Crore Investment

IIFL Capital Services shares gained up to 6% on May 7 after the company announced that Fairfax India Holdings Corporation will increase its stake in the company through a ₹2,000 crore investment. At around 9:30 am, IIFL Capital shares were trading nearly 5% higher at ₹348.7 apiece.

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Fairfax India To Raise Stake To 51%

According to the company’s stock exchange filing, Fairfax India will increase its shareholding in IIFL Capital to a minimum of 51% through a combination of preferential allotment, open offer, and arrangements with existing promoters.

The investment will be made through FIH Mauritius Investments Ltd, a wholly owned subsidiary of Fairfax India.

The preferential allotment has been priced at ₹350 per share, which represents a premium of about 5.3% over the company’s previous closing price. Fairfax India and its affiliate currently hold around 30.5% stake in IIFL Capital.

Open Offer To Follow Transaction

The proposed transaction will also trigger an open offer for IIFL Capital shares in line with Indian market regulations related to minimum public shareholding requirements.

The company said the transaction remains subject to shareholder approval and other regulatory clearances.
Following completion 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, according to the filing.

Board Representation Planned

IIFL Capital said FIH Mauritius Investments will have the right to nominate two directors to the company’s board after the required approvals are received.

The company added that the proposed capital infusion is expected to strengthen its balance sheet and support business operations across capital markets, wealth management, asset management, institutional equities, and investment banking businesses.

Company Comments On Investment

Fairfax India Chairman Prem Watsa said in the company statement that the investment is aimed at supporting IIFL Capital’s future growth plans in wealth and asset management services.

IIFL Capital promoter Nirmal Jain said Fairfax India has been associated with the IIFL Group for more than 15 years and described the relationship as a long-term partnership built on mutual trust.

The announcement kept IIFL Capital shares in focus during the trading session as investors tracked developments related to the proposed stake increase.