IIFL Finance to seek up to ₹5,000 crore by selling minority stake as Fairfax plans exit

IIFL Finance disclosed a plan to issue new shares that would dilute current holdings by 10-20%, seeking to raise between ₹2,500 crore and ₹5,000 crore. The move is linked to expectations that Fairfax, after integrating IIFL Capital into IDBI Bank, will eventually reduce or exit its stake in the NBFC, a timeline that could extend up to a year. The company intends to preserve control by allowing promoters to subscribe to warrants, while looking for a minority investor rather than a strategic partner.

It highlighted potential synergies from being part of IDBI, such as access to the bank’s SME and retail customers, and reiterated its focus on serving small-ticket MSME borrowers rather than becoming a full-service bank. IIFL Finance also noted that gold loans make up about 50-60% of its ₹1.25 lakh-crore asset base and is working to diversify into property-backed loans and other products. Its home-loan subsidiary, backed by Abu Dhabi Investment Authority, is well-capitalised and may consider a future demerger or listing.