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IIFL Capital share price jumped as much as 6% in Thursday's trading session after the company announced it would issue preferential shares to Fairfax India.
The stock opened at ₹335 apiece today, as compared to the previous close of ₹332.50 on Wednesday and rose to the day's high of ₹359 per share.
In an exchange filing dated 7 May, IIFL Capital said that Fairfax India will increase its shareholding, through its wholly owned subsidiary, FIH Mauritius Investments, by capital infusion of ₹2,000 crore.
The company’s board has approved the allotment of 5.71 crore fully paid-up equity shares to FIH Mauritius through a preferential issue at ₹350 per share. Following the allotment, FIH Mauritius’ stake in IIFL Capital will increase from 27.18% to 38.47% on a pre-open offer basis.
In line with SEBI’s Substantial Acquisition of Shares and Takeovers Regulations, the preferential allotment will trigger a mandatory open offer to the company’s public shareholders, as it results in a change in control.
After the completion of the preferential allotment and the open offer, FIH Mauritius will be designated as a promoter of IIFL Capital along with the existing promoters, including Nirmal Bhanwarlal Jain, who owns 15.08% of the pre-issue capital, and Venkataraman Rajamani, who holds 3.59%. HWIC Asia Fund (Class A Shares), an affiliate of FIH Mauritius with an existing 3.33% stake in the company, will also be reclassified as part of the promoter group.
FIH Mauritius will gain the right to appoint two non-executive directors to the board as long as its holding remains at or above 20% of the share capital, and one director if its stake stays above 10%. Accordingly, the board will be restructured once the transaction is completed.
“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,” said Nirmal Jain, Promoter, IIFL Capital.
The transaction remains subject to shareholder approval at the EGM scheduled for June 1, 2026, along with regulatory approvals from the Competition Commission of India, SEBI, BSE, and NSE. The company will also revise its Articles of Association to include the special rights granted to FIH Mauritius under the Investment Agreement.
The share price trend of IIFL Capital has largely remained positive despite weak market sentiments. The stock has gained over 11% in a week and 31.54% in a month.
However, the multibagger stock has lost 9% year-to-date (YTD) but has given 50% gains in a year.
Looking at the broader level, the stock has delivered a whopping 500% return in three years and 438% returns in five years.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
Vaamanaa covers business and stock market news. Started in 2020, she has been producing news on digital platforms for over 4.5 years now. She writes on markets, commodities, IPOs, and industry. She has worked for news channels like Jagran New Media and Business Insider India. You can reach out to her at vaamanaa.sethi@htdigital.in.
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