Shares of IIFL Capital are surging in trade on Thursday after the company confirmed that Canada's Fairfax India Holdings Corporation will infuse Rs 2,000 crore into the company through a preferential allotment at Rs 350 per share.
The stock is trading at Rs 350.85, accounting for gains of more than 5.5% compared to Wednesday's closing price of Rs 332.5.
The RSI of the stock stands at 59.79, indicating a neutral momentum reading, while the stock has delivered returns of 52% over the last 12 months.
Under the proposed transaction, Fairfax India, through its wholly owned subsidiary FIH Mauritius Investments Ltd, will increase its shareholding in IIFL Capital to a minimum of 51% through a combination of a preferential allotment, an open offer, and arrangements with existing promoters, the company confirmed in a press release.
Upon completion, Fairfax India and its affiliate HWIC Asia Fund Class A will join the promoter group alongside co-promoters Nirmal Jain and R. Venkataraman, who will continue in their existing roles.
The Fairfax Group is not a new entrant - it currently holds approximately 30.5% in IIFL Capital through FIH Mauritius and its affiliate, making this a deepening of an already established relationship. Subject to shareholder and regulatory approvals, FIH Mauritius will have the right to nominate two directors to the board.
The Rs 2,000 crore primary capital infusion 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, and investment banking businesses.
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