IIFL Capital shares jump after Fairfax India unit buys controlling stake, triggers open offer

Upon completion of both the preferential issue and the open offer, FIH Mauritius will be classified as a "promoter" of IIFL Capital, alongside the existing promoters.

By Hormaz Fatakia

In a significant ownership development, IIFL Capital Services Ltd., formerly known as IIFL Securities Ltd., has announced a ₹2,000 crore preferential allotment to FIH Mauritius Investments Ltd., a wholly-owned subsidiary of Fairfax India Corporation. The move that will hand FIH Mauritius effective control of the company.

The company's board approved the issuance of 5.71 crore fully paid-up equity shares at a price of ₹350 per share to FIH Mauritius on a private placement basis. Post allotment, FIH Mauritius's shareholding in IIFL Capital will rise from its current 27.18% to 38.47% on a pre-open offer basis.

Under SEBI's Substantial Acquisition of Shares and Takeovers Regulations, FIH Mauritius is required to make a mandatory open offer to the public shareholders of the company, given that the preferential allotment will trigger a change of control.

Upon completion of both the preferential issue and the open offer, FIH Mauritius will be classified as a "promoter" of IIFL Capital, alongside the existing promoters including Nirmal Bhanwarlal Jain, who currently holds 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 that already holds 3.33% of the company, will simultaneously be reclassified as a member of the promoter group.

FIH Mauritius will also have the right to nominate two non-executive directors to the board as long as it holds at least 20% of the share capital, and one director if its stake remains above 10%. The board will be reconstituted accordingly upon deal completion.

The deal is subject to shareholder approval at an EGM convened for June 1, 2026, as well as regulatory clearances from the Competition Commission of India, SEBI, BSE, and NSE. The company will also amend its Articles of Association to incorporate the special rights granted to FIH Mauritius under the Investment Agreement.

Shares of IIFL Capital are up 7% in early trading on Thursday at ₹357.4. The stock is up 36% in the last one month.