IIFL Holdings locked at 5% lower circuit post spin-off; hits Rs 200 on NSE

On the National Stock Exchange, the stock has frozen 5 per cent lower circuit at Rs 200, after opening at Rs 210.

Shares of IIFL Holdings hit the lower circuit of 5 per cent at Rs 188 on the BSE after the stock turned ex-spin off today. On the National Stock Exchange (NSE), the stock slipped to Rs 200 apiece, its lower circuit filter for the day after opening at Rs 210.

Till 12:54 pm, a combined 64,584 equity shares had changed hands and there were pending sell orders for 9,11,397 shares on the BSE and NSE.

The board of directors of the company, at their meeting held on January 31, 2018, had approved the reorganisation of IIFL Group, into three listed entities -- IIFL Finance (loans and mortgages), IIFL Wealth (wealth and asset management) and IIFL Securities (capital markets)-- which become effective from May 13, 2019. IIFL Holdings has fixed May 31, 2019 as record date for scheme of arrangement.

As per scheme approved by IIFL Holdings, the incumbent owner of seven shares of IIFL Holdings will be eligible to hold seven shares of IIFL Finance, seven shares of IIFL Securities and one share of IIFL Wealth once the spin-off companies get listed. Under the new arrangement, while IIFL Wealth and IIFL Securities have been demerged -- the record date will be announced soon, IIFL Holdings will be renamed as IIFL Finance.

"Two of the three businesses, namely loans & mortgages and wealth & asset management have external private equity investors. They will now have price discovery and exit option on secondary markets, post listing and expiry of lock in periods," the management said.

It further added that independently listed businesses make it easier to forge a partnership with a strategic investor. "Besides, they would attract different sets of financial investors, helping the process of fair price discovery for all three businesses," IIFL said.