 "Promoters are not selling stake: Nirmal Jain")
Fairfax India Holdings’ move to mop up 26 per cent stake in IIFL Holdings at a cost of Rs 1,600 crore will not result in a change in control, according to the group's founder. IIFL chairman Nirmal Jain tells Sachin P Mampatta the promoters will not participate in the offer. Edited excerpts:
Will Fairfax play a more active role in management?
This is not a deal with the company. It is a secondary market transaction. There’s no plan for any management control change or anything like that.
How did this come about?
They (Fairfax) have been invested in our company through different funds for the past four-five years. So they know us.
How would this change their representation on the board?
They already have a seat on the board of the company. There will be no change in the representation as it stands right now.
Do you expect more such deals in the capital market space?
Fairfax has a billion dollars in assets, which it is looking to deploy. Even if this open offer is to be a 100 per cent success, they would have deployed around $250 million. This still leaves a lot of capital to be deployed. Besides, there are other investors out there in the market.
The promoters' stake in IIFL has been on the decline. Could you put this in context?
The promoters, Venkat and I, have not sold any stake since inception. There has been a marginal decline in recent times in our stake on account of ESOPs (employee stock options) coming into play. The number of equity shares is going up, which means that our proportionate stake has declined slightly.
Would the promoters be participating in the open offer?
No, the promoters would not be selling shares in the open offer.
What is the status of fund-raising for your non-banking financial company?
That plan is still being worked out and it is separate from this. The board will consider various options. We will be looking to raise equity capital, and hope to do so by the end of the financial year.
Do you see any business synergies?
The Fairfax name gives credibility. And they have always been helpful with whatever relationships that they have.
Will Fairfax play a more active role in management?
This is not a deal with the company. It is a secondary market transaction. There’s no plan for any management control change or anything like that.
How did this come about?
They (Fairfax) have been invested in our company through different funds for the past four-five years. So they know us.
How would this change their representation on the board?
They already have a seat on the board of the company. There will be no change in the representation as it stands right now.
Do you expect more such deals in the capital market space?
Fairfax has a billion dollars in assets, which it is looking to deploy. Even if this open offer is to be a 100 per cent success, they would have deployed around $250 million. This still leaves a lot of capital to be deployed. Besides, there are other investors out there in the market.
The promoters' stake in IIFL has been on the decline. Could you put this in context?
The promoters, Venkat and I, have not sold any stake since inception. There has been a marginal decline in recent times in our stake on account of ESOPs (employee stock options) coming into play. The number of equity shares is going up, which means that our proportionate stake has declined slightly.
Would the promoters be participating in the open offer?
No, the promoters would not be selling shares in the open offer.
What is the status of fund-raising for your non-banking financial company?
That plan is still being worked out and it is separate from this. The board will consider various options. We will be looking to raise equity capital, and hope to do so by the end of the financial year.
Do you see any business synergies?
The Fairfax name gives credibility. And they have always been helpful with whatever relationships that they have.