IIFL Capital Shares Surge 6% on Fairfax's Rs 2,000-Crore Stake Raise

Fairfax India to Increase Stake in IIFL Capital Services

Fairfax India, an investment holding company backed by Canada-based Fairfax Financial Holdings, plans to increase its stake in IIFL Capital Services to 51% through an investment of Rs 2,000 crore at Rs 350 per share. This move is expected to significantly strengthen 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.

The investment will be made through Fairfax India's unit FIH Mauritius Investments through a preferential allotment priced at Rs 350 per share, which is a 5.3% premium to IIFL Capital's closing price on Wednesday. Currently, Fairfax India holds a 30.5% stake in the company. 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. 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.

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At 9:30 am on May 7, IIFL Capital shares were trading 5% higher at Rs 348.7 apiece. The proposed capital infusion of Rs 2,000 crore at Rs 350 per share is expected to have a positive impact on the company's financials.

The following table compares the current and proposed stake of Fairfax India in IIFL Capital Services:

Prem Watsa, founder of Fairfax India, commented on the investment, saying that IIFL Capital is now one of India's leading financial services companies, and with this new capital infusion, 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.

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Nirmal Jain, Promoter, IIFL Capital, stated that Fairfax India (and its affiliate) has been a trusted long-term partner of the IIFL Group for over 15 years, and together they 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.