Fairfax India made an open offer to increase its stake to 26% in the financial firm IIFL Holdings. IIFL is valued at INR 6,400 crores. Fairfax is paying INR 1,621 ($225 million) crores for the stake. The whole exercise is subjected to be completed in few months once regulatory authorities approve the deal.
Fairfax India was formed in 2014 and Fairfax is holding 8.97% in IIFL and another 5.24 % through derivative instruments. These stakes were taken prior to the formation of Fairfax India. The company was formed to capitalize Fairfax investment in businesses in India. As a first step, Fairfax is consolidating its position in India. It is well known that Fairfax has ownership interests in the financial arm of IIFL. On the other hand, IIFL operates several businesses like non-banking finance, housing finance, wealth management, retail broking, institutional equities, investment banking and distribution of insurance policies.
Fairfax proposed to acquire a stake of 8.3 crores equity shares for a consideration of INR 195 as per regulations of SEBI’s acquisitions of shares and takeovers. Fairfax India was formed by Fairfax Corporation to invest in India businesses.
IIFL diversified businesses generated revenue to the tune of INR 2,220 crores and INR 480 crores in earnings. Fairfax India has announced its wholly owned subsidiary FIH Mauritius Investment Ltd has made an open offer for the stake purchase. Point to be remembered, Fairfax India is headed by Prem Watsa, earlier had made an unsuccessful bid to acquire Smartphone maker BlackBerry in 2013.