FIPB nod for Watsa's IIFL investment, no change in mgmt

IIFL group Chairman Nirmal Jain has said the completion of the open offer from Prem Watsa-owned Fairfax Holdings, for which the Canadian NRI investor has got the FIPB approval today, will not lead to any change in management of the financial services group.
"It is an open offer to the public shareholders and neither are the promoters diluting their holdings nor is the company issuing fresh equities. Therefore, there is no question me stepping aside or a new management coming in," Jain told PTI this evening.
Earlier in the day, the Foreign Investment Promotion Board (FIPB) cleared a proposal from Watsa's company to increase the stake in IIFL by 26 per cent through an open offer involving around Rs 1,621 crore. The deal will see the foreign equity increase from 50.16 per cent to 80 per cent.

Jain said Watsa already owns 14 per cent in the group and he is seeking to increase it by up to 26 per cent through the open offer, worth around Rs 1,600 crore.
The IIFL group promoter Jain and R Venkataraman, who is the co-promoter and managing director, together own around 30 per cent in the company (23 per cent is with Jain and 7 per cent with other), while foreign investors hold 50.16 per cent. The rest of the equities are with the public and other institutions.
According to an exchange filing last month, the Fairfax open offer for 26 per cent post-offer equity share capital of IIFL was to commence on October 29, and close on November 13.

The deal was being managed by ICICI Securities.

The open offer to acquire 83,128,852 shares was carried out by Fairfax India Holdings Corporation through its wholly-owned arm FIH Mauritius Investments, at a price of Rs 195 per share, aggregating to around Rs 1,621 crore.
"General Atlantic's investment will help to support
the company's continued growth and platform expansion as the premier wealth management company in India," IIFL had said, adding the offer involved allotment of 17 lakh equity shares of its wealth management arm at a price of Rs 586.70 each for total consideration of Rs 100 crore to General Atlantic.

Additionally, IIFL Holdings had allotted 1.36 crore warrants of IIFL Wealth for an estimated Rs 863 crore to the international private equity firm. Besides, General Atlantic Singapore acquired 27.15 lakh shares worth Rs 159.34 crore from employees of IIFL Wealth Management (IIFLW).
Overall, IIFL said the transactions would result "in total investments of Rs 1,122.34 crore from General Atlantic leading to an equity ownership by GA of up to 21.61 per cent in IIFLW on a fully diluted basis.
As on September 2015, IIFL Holdings owned 76.79 per cent of the total outstanding shares of IIFL Wealth, which came down to 53.86 per cent.

IIFL Wealth was founded in 2008 by IIFL Holdings with Karan Bhagat, Yatin Shah and Amit Shah. IIFL Wealth has about USD 12 billion assets for over 8,600 clients through its over 150 relationship managers.
IIFL Holdings had reported a 28 per cent rise in net profit for the September quarter at Rs 140.3 crore on an income of Rs 1,031.9 crore, which rose 15 per cent.