Carlyle raises stake in IIFL to 9%

US private equity giant Carlyle has bought an additional 2.65 per cent stake in India Infoline (IIFL), taking its total holding in the Mumbai-based financial services firm to nine per cent.

Carlyle Mauritius Investment Advisors, part of Carlyle Asian Partners, acquired the shares through open market purchases for an undisclosed amount. After the latest increase, Carlyle has become one of the biggest institutional shareholders of IIFL and will get a board seat.

Last month, Carlyle had raised its stake in IIFL to 6.35 per cent by purchasing an additional 5.2 million shares for Rs 40.55 crore. Shares of IIFL rose 1.95 per cent, or Rs 1.35, to Rs 70.75 on the Bombay Stock Exchange (BSE) on Wednesday. That values Carlyle’s nine per cent stake in the firm at Rs 192.15 crore.

Like its peers, IIFL shares have lost 41 per cent in the last one year as reduction in high-margin cash volumes and increased share of the low-margin options segment in the overall market volume has hurt profitability in its stock broking business.

“Carlyle has made a number of successful investments in financial institutions and has always shown a long-term orientation. We hope to leverage our relationship with Carlyle to continuously grow and expand internationally,” Nirmal Jain, chairman of IIFL, said in a statement.

Carlyle has invested more than $2 billion in Asian financial services business, including HDFC in India.