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% through an investment of 20 billion rupees ($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% premium to IIFL Capital’s closing price on Wednesday.
Fairfax India currently holds a 30.5% 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.
Reuters
