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Fairfax eyes IIFL Capital stake, aiming for co-promoter role
21 Apr
Summary
- Fairfax seeks to acquire nearly 10% stake in IIFL Capital via preferential allotment.
- The transaction could lead to Fairfax becoming a co-promoter and majority shareholder.
- The deal aims to raise approximately Rs 1,000 crore for IIFL Capital's growth.
Fairfax Financial Holdings Ltd., a Canadian financial company, is reportedly in advanced discussions to acquire a significant additional stake in IIFL Capital Services Ltd. The transaction would occur through a preferential allotment of equity shares, a move sources indicate could result in Fairfax becoming a co-promoter and majority shareholder of the Mumbai-based wealth management firm.
Sources familiar with the matter revealed that Fairfax intends to purchase approximately a 10% stake, with an estimated cost of Rs 1,000 crore. Such an acquisition would necessitate an open offer to other shareholders, as per takeover regulations. As of March, IIFL Capital has a market capitalization of Rs 10,200 crore, with promoters holding about 30.9% and Fairfax, via FIH Mauritius Investments, already possessing a 27.2% stake.
The deal is nearing its final stages and is expected to be concluded within the coming weeks, pending necessary regulatory and shareholder approvals. The capital infusion is earmarked for the expansion of IIFL Capital's wealth management and asset management divisions, signaling a deeper commitment from Fairfax to the company's long-term strategy and operational direction.
