MUMBAI: Fairfax India Holdings Corp., the investment firm founded by Canadian billionaire Prem Watsa, has agreed to inject ₹2,000 crore into IIFL Capital Services Ltd. through a preferential allotment of shares, a transaction that will increase its holding in the company and trigger a mandatory open offer to public shareholders.
IIFL Capital’s board approved the issuance of 5.71 crore shares at ₹350 apiece to Fairfax entity FIH Mauritius Investments Ltd, the company said in a filing to the exchanges on Thursday. The price represents a 6% premium to Wednesday’s closing price of ₹331.45 in Mumbai.
The allotment will raise FIH Mauritius’ stake in the financial services firm from 27.18% to 38.47%. Fairfax’s combined holding through FIH Mauritius and HWIC Asia Fund will rise to 41.8%.
The transaction will trigger a mandatory open offer under takeover regulations set by the Securities and Exchange Board of India. , promoter of IIFL Capital, told Mint that through the open offer, the Canadian investment firm’s stake will further increase and promoters will cooperate to help Fairfax achieve a minimum 51% stake over time.
Following completion of the transaction and the open offer, Fairfax will be classified as a promoter of the company. Existing co-promoters Jain and R. Venkataraman, who founded the broader India Infoline group in 1995, will retain their roles within the company.
“Fairfax is a globally respected investment group with a long-term track record of building and supporting high-quality financial services businesses across markets. Their capital infusion and support will further strengthen our outreach and enable IIFL to access a broader global network of clients, which we believe can meaningfully enhance the company’s revenues over time,” Jain told Mint. “We also expect the transaction to support an improvement in our credit rating going forward, subject to necessary regulatory approvals and closures.”
The investment agreement also includes provisions for the potential acquisition of additional equity shares by Fairfax from Jain and Venkataraman under specific circumstances.
Under the agreement, Fairfax will have the right to nominate two non-executive directors to the board as long as its shareholding remains at least 20%. The entitlement will reduce to one director if its stake falls between 10% and 20%.
The board also approved amendments to the company’s Articles of Association to incorporate these rights, subject to shareholder approval. IIFL Capital has scheduled an extraordinary general meeting on 1 June to seek approval for the share issuance and adoption of the amended articles.
IIFL Capital Services, previously known as IIFL Securities Ltd, provides equity broking, wealth management, asset management and investment banking services.
“With this new capital infusion we believe the company is well positioned for the future as it expands its wealth and asset management services offerings, while maintaining its leading position in retail broking and financial services,” Watsa was quoted as saying in a press statement.
Apart from IIFL Capital, Fairfax’s key India investments include a major stake in Bangalore International Airport and significant holdings in CSB Bank.
Fairfax’s investment in IIFL Capital comes as brokerage houses and wealth managers face intensifying competition, rising technology spending and a push to scale capital markets businesses, even as deal activity remains uneven amid global market volatility.
The competitive landscape shifted significantly in mid-2025 with the launch of Mutual Fund, while established players such as 360 ONE WAM moved to consolidate the market by acquiring the onshore wealth unit of UBS and announcing a nearly ₹1,900 crore takeover of Batlivala & Karani Securities.
Traditional firms are also stepping up digital investments to compete with discount brokers, as seen in Kotak Securities’ expansion of its Kotak Neo platform to integrate artificial intelligence-driven tools for relationship managers and full digital onboarding.