Fairfax India to raise stake in IIFL Capital to 51% via $211 mn investment

IIFL Capital Services said on Thursday that Fairfax India, an investment ​holding company backed by Canada's Fairfax Financial ​Holdings, will raise its stake in the ‌firm to 51 per cent through an investment of ₹2,000 crore ($211.1 million).

Fairfax India will invest via its unit FIH Mauritius Investments through a preferential allotment priced at 350 rupees per share, a 5.3 per cent premium to IIFL Capital's closing price on Wednesday.

Fairfax India currently holds a 30.5 per cent stake in the company.

The ‌capital infusion comes as domestic brokerages and wealth managers face intensifying competition, rising technology spending and a push to scale capital markets businesses, even as deal activity remains uneven amid global market volatility.

 

The investment will strengthen IIFL Capital's ​balance sheet and support its next phase of growth across capital ‌markets, wealth and asset management, institutional equities, investment banking and related financial services, ​the ‌companies said.

Subject to shareholder and regulatory approvals, FIH ‌Mauritius will have the right to nominate two directors to IIFL Capital's board.

The transaction will ‌trigger an ​open offer ​for IIFL Capital's shares in accordance with Indian market regulations on minimum public shareholding.