Canadian investment will strengthen IIFL Capital balance sheet
Fairfax India Holdings Corporation of Canada, through its wholly owned subsidiary, FIH Mauritius Investments Ltd, will invest Rs.2,000 crore and increase its shareholding in the Mumbai-listed IIFL Capital Services Ltd, where it is an existing investor, through a combination of transactions including a preferential allotment of equity shares, an open offer, and arrangements with the existing promoters, such that its stake in the Company increases to a minimum of 51%.
The proposed capital infusion of Rs.2,000 crore at Rs.350 per share, will significantly strengthen the IIFL Capital’s balance sheet and support the next phase of growth across its capital markets, wealth management, asset management, institutional equities, investment banking, and related financial services businesses, Fairfax India said on 7 May.
Upon completion of the transaction, Fairfax India (and its affiliate, HWIC Asia Fund Class A) will join the existing Promoter Group alongside Nirmal Jain and R. Venkataraman, Fairfax India said on 7 May.
The Fairfax Group has been a longstanding shareholder of the Company. Fairfax India, through FIH Mauritius and its affiliate, currently holds about 30.5 % in IIFL Capital. Subject to shareholder and regulatory approvals, FIH Mauritius will have the right to nominate two directors on the Board of the Company.
The proposed transaction remains subject to customary regulatory, and shareholder approvals, including applicable open offer requirements under SEBI regulations.
Fairfax’s global reputation, long-term investment philosophy, financial strength, and international network are expected to further enhance IIFL Capital’s strategic positioning, strengthen institutional credibility, broaden global relationships, and support a lower cost of capital over time.
The induction of Fairfax representatives onto the Board is also expected to further strengthen governance standards, oversight, risk management frameworks, and institutional processes, while preserving the entrepreneurial and execution-focused culture of the Company.
Prem Watsa, Founder of Fairfax India, commented on the investment, “Fairfax has enjoyed a long-standing and successful partnership with IIFL Capital and its founders, Nirmal Jain and R. Venkataraman, who have done an outstanding job growing IIFL Capital’s business. IIFL Capital is now one of India’s leading financial services companies, and with this new capital infusion we believe the company is well positioned for the future as it expands its wealth and asset management services offerings, while maintaining its leading position in retail broking and financial services.”
Nirmal Jain, Promoter, IIFL Capital, said, “Fairfax India (and its affiliate) has been a trusted long-term partner of the IIFL Group for over 15 years, and together we have created significant value for all stakeholders. Over the years, this relationship has been built on deep mutual trust, shared values, and a long-term commitment to institution building.”
R Venkataraman, Co-Promoter and Managing Director, IIFL Capital, said, “At a time when the Indian economy and financial markets are at a major inflection point, we believe this is the right moment for IIFL Capital to benefit from strong parentage and position itself for the next phase of growth. This transaction reflects Fairfax’s continued confidence in IIFL Capital’s leadership team, and its robust business model.”
IIFL Capital Services Ltd (formerly known as IIFL Securities Limited) (NSE: IIFLCAPS) (BSE: 542773) is one of the key capital market players in the Indian financial services space. IIFL Capital offers broking services, wealth management, financial products distribution, institutional broking, research and investment banking services. Fiinews.com
