Mumbai: Billionaire investor Prem Watsa-led Fairfax India Holdings is looking to increase its stake in IIFL Capital Services to at least 51% as the company looks to provide capital for the company’s next phase of growth in wealth management, capital markets, asset management, investment banking and other related financial service businesses.
Fairfax aims to inject ₹2,000 crore in IIFL Capital as it looks to boost IIFL’s growth trajectory as it looks to tap into India’s growing wealth management sector which is witnessing a shift from investments in gold or real estate to financial products- a strength IIFL Capital already has.
Through its Mauritius subsidiary, FIH Mauritius, the company already holds 30.5% in the company. With this investment, Fairfax will be able to nominate two directors to the company’s board, subject to regulatory approvals.
Though the company will continue to be led by the current management, the induction of Fairfax representatives to the Board is expected to strengthen governance standards, risk management frameworks and institutional processes, while preserving the entrepreneurial and execution focused culture of the company.
“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 posiƟon in retail broking and financial services.” Mr. Prem Watsa, Founder of Fairfax India said in a press release.
“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 stakeholde₹ Over the years, this relationship has been built on deep mutual trust, shared values, and a long-term commitment to institution building”. Mr. Nirmal Jain, Promoter, IIFL Capital, added.
“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.” Mr. R Venkataraman, Co-Promoter and Managing Director, IIFL Capital, said.
