According to reports from Economic Times, TPG Capital is closing in on acquiring a significant minority stake of 30-40% in billionaire Nirmal Jain's flagship listed financial services firm, IIFL Capital Services, potentially emerging as the single largest shareholder. The US buyout group is currently conducting due diligence with the aim of triggering an open offer for an additional 26% stake. IIFL Capital closed at ₹389 on the BSE on Tuesday, up 2.5% for a market value of ₹12,119.18 crore. The investment coincides with Jain's efforts to transform his brokerage firm and re-enter wealth management to repeat the success of 360 One, which was earlier part of his group.
As reported by Economic Times, TPG's investment could be a combination of primary and secondary capital infusion, with final contours crystallising in the coming weeks. At current prices, TPG's investment could be in the range of ₹3,635.7 crore to ₹4,847.6 crore, excluding the open offer. If fully subscribed, the transaction size could go up to about ₹8,000 crore. The IIFL stock has zoomed 26% since December on speculation of a potential investor entering to provide growth equity. A deep-pocketed partner at this juncture will be key for Jain's expansion plans, as TPG also has exposure in competing shadow lenders.
According to the report, the promoters, led by Jain and his wife Madhu, own 30.98%, while Prem Watsa-backed Fairfax is the second largest shareholder with a 27.27% stake held via FIH Mauritius Investment. Abu Dhabi Investment Authority is also a backer. The eventual holding will depend on the stock tendered by minority shareholders in the open offer. An investment at the listed entity makes it easier for an eventual exit and automatically gives exposure to the whole portfolio.
As reported by Economic Times, headquartered in Mumbai, IIFL Capital decided to pivot toward becoming a full-service wealth manager in 2024, changing its name from IIFL Securities to IIFL Capital in the previous fiscal year. The company has a national presence through more than 100 branches and 3,500 external wealth partners. Its primary business remains broking and allied activities such as margin trading facility, depository and retail brokerage that contributed 74% of total income for the first nine months of FY25. The distribution of financial products was the second-largest business vertical, contributing 16% of income, followed by investment banking at 10%.
According to the report, during the first nine months of fiscal 2025, total income and PAT were ₹1,994 crore and ₹585 crore, respectively. The company had a market share of 0.67% of the turnover volume of the National Stock Exchange for the first half of FY25. After hiring senior leaders from ASK Wealth, the company has added over 100 relationship managers for wealth management in the last 18 months from Citi, Barclays, Axis Bank and Standard Chartered, with an aim to build a franchise with ₹50,000-crore assets under management. The company has a pan-India presence with more than 457,000 active clients as of September 30, 2024, and a margin trading facility gross book of ₹1,427 crore as of December 31, 2024.
