TPG revives 'strategic investment' talks with IIFL Capital for 20% stake

IIFL group firm plans to scale up wealth management, private credit businesses

US-based alternative asset manager TPG has revived talks with IIFL group’s broking and wealth arm IIFL Capital Services to come in as a strategic investor by acquiring around 20 per cent stake in the company, sources aware of the development said. TPG, which is currently conducting due diligence on the transaction, may also get a board seat in the company. 

The companies had been in talks since mid-2025, but discussions had stalled and have now been revived, the sources said. 

IIFL Capital aims to capitalise on the country’s wealth boom by expanding its wealth management business, and is exploring a strategic investment at an attractive valuation, the sources said, adding that the company is also looking to scale up its private credit business as alternative sources of funding for the commercial sector gain traction. IIFL Capital, shares of which ended the day at ₹394.75 apiece, has a market capitalisation of ₹12,271.51 crore. 

 

Currently, the promoters — Nirmal Jain, Madhu Jain, Venkataraman Rajamani, and others — own around 31 per cent stake in the company while Canada-based Fairfax, through FIH Mauritius Investments, holds 27.27 per cent stake.

 

An email sent to IIFL Capital did not elicit a response.

 

The sources said TPG could acquire a portion of Fairfax’s stake in the company while a part of the promoters’ holding may also be diluted to bring in the strategic investor. However, the exact extent of Fairfax’s stake sale and the promoters’ dilution has not yet been ascertained, they said.

 

In a notification to exchanges on Wednesday, IIFL Capital said the company explores various strategic opportunities from time to time. However, as on date, there is no information or development that requires disclosure, it said.

 

IIFL Capital offers broking, wealth management, financial products distribution, institutional broking, research, and investment banking services. The company has a net worth of ₹2,810 crore, and assets under management (AUM) of ₹2.48 trillion. It has over 3,500 external wealth managers, and over 100 branches nationwide, along with institutional sales teams in Mumbai, Singapore, London, and New York for domestic and global coverage.

 

In 2019, the IIFL group completed a demerger to create separately focused, independently listed entities. Under the restructuring, the group was split into three businesses: IIFL Finance (lending and financing), IIFL Wealth Management (wealth and asset management), and IIFL Securities (capital markets and broking). IIFL Securities changed its name to IIFL Capital Services with effect from November 5, 2024.

 

The financial services sector has seen a spate of deals in the past one year.

 

Japan-based MUFG Bank, a consolidated subsidiary of Mitsubishi UFJ Financial Group (MUFG), is investing ₹39,618 crore (about $4.4 billion) to acquire a 20 per cent stake in Shriram Finance. Sumitomo Mitsui Banking Corporation (SMBC) of the Sumitomo Mitsui Financial Group (SMFG) acquired over 24 per cent stake in private sector lender Yes Bank for over $1.6 billion. Additionally, Japan’s Mizuho Financial Group is acquiring a controlling over 60 per cent stake in Avendus Capital through its subsidiary Mizuho Securities by buying out the stake held by US-based private equity firm KKR via Redpoint Investments in the investment bank for $516 million.

 

NBD Emirates is pumping in a $3 billion investment in RBL Bank for a 60 per cent stake. International Holding Company (IHC) has also proposed a $1 billion investment for over 42 per cent stake in Sammaan Capital.

 

Warburg Pincus and Abu Dhabi Investment Authority (ADIA) have invested $877 million in IDFC FIRST Bank, and US-based Blackstone is investing ₹6,196 crore for a 9.99 per cent stake in Federal Bank.