IIFL Finance Ltd, a retail-focused non-banking financial company (NBFC), has approved a primary capital raise of ₹6,414 crore ($686 million) through preferential allotments to funds managed by Blackstone Private Equity, the company’s promoters and Anchorage Capital.
Blackstone will invest ₹5,000 crore ($535 million) through compulsorily convertible preference shares (CCPS), while promoters Nirmal Jain and R. Venkataraman will invest ₹1,264 crore ($135 million) through warrants. Anchorage Capital will participate with a primary equity investment of ₹150 crore ($16 million).
Blackstone to invest ₹5,000 crore
It will be one of the largest primary private equity Infusions in a listed Indian NBFC, led by Blackstone and the promoters
The CCPS allotted to Blackstone will convert into equity shares at ₹602 a share within 18 months of allotment.
Capital to support lending expansion
The fund-raise is expected to strengthen IIFL Finance’s capital adequacy, improve its cost of funds and accelerate growth in its gold finance business.
The company aims to use the additional capital to expand its secured lending businesses and strengthen its position as a diversified retail NBFC.
Governance and technology focus
The proposed appointment of Blackstone representatives to the company’s board is expected to strengthen governance standards and oversight while retaining its entrepreneurial culture and execution focus.
Leadership comment
“Blackstone investment strengthens our balance sheet and gives us the headroom to scale our franchises, invest further in technology, and deepen our co-lending partnerships with banks, while staying disciplined on risk and capital,” IIFL Finance, Founder and Managing Director, Nirmal Jain, said.
“Building great businesses has been central to our approach over more than two decades of investing in India, and we look forward to partnering with Nirmal, Venkat and the management team to support IIFL Finance’s continued growth,” Blackstone, Chief Investment Officer for India Private Equity and Senior Managing Director, Mukesh Mehta, said.
Capital Adequacy Ratio
The capital infusion is expected to provide the company with additional financial capacity to pursue its growth plans across retail lending businesses.
The entire investment will be infused as primary capital. This will raise the capital adequacy ratio from 17% to 30% (proforma Sept-26), support the next phase of growth across its secured lending businesses, and could improve its credit ratings and lower its borrowing costs over time.