Global private equity firm General Atlantic Singapore Fund Pte Ltd will acquire 21.61 per cent shareholding in IIFL Wealth Management Ltd, the wealth management subsidiary of IIFL Holdings Ltd, for an estimated Rs 1,122.34 crore.
IIFL Holdings in a announcement yesterday said, "General Atlantic will make a strategic investment to become a minority shareholder in wealth subsidiary IIFL Wealth Management Ltd."
"General Atlantic's investment will help to support the company's continued growth and platform expansion as the premier wealth management company in India," IIFL said.
IIFL board has approved the proposed issue and allotment of 17 lakh equity shares of its wealth management arm at a price of Rs 586.70 each for total consideration of Rs 100 crore to General Atlantic, as per the filing with the BSE.
Additionally, IIFL Holdings would allot 1.36 crore warrants of IIFL Wealth for an estimated Rs 863 crore to the international private equity firm.
On full conversion of warrants (which may take up to 18 months), the proposed transaction will result in aggregate investment by General Atlantic of up to Rs 963 crore into IIFL Wealth Management.
Besides, General Atlantic Singapore will acquire 27.15 lakh shares worth Rs 159.34 crore from employees of IIFL Wealth Management.
Overall, the IIFL said the transactions would result "in total investments of Rs 1,122.34 crore from General Atlantic (GA) leading to an equity ownership by GA of up to 21.61 per cent in IIFLW on a fully diluted basis".
As on September 30, 2015 IIFL Holdings owns 76.79 per cent of the total outstanding shares of IIFL
"Upon the co summation of the transaction, the company will own 53.86 per cent of IIFLW on a fully diluted basis that is assuming full conversion of warrants over the next 18 months and maximum possible dilution due to vesting of all outstanding stock options over the next four years," IIFL said in the BSE filing.
IIFL Holdings founder and chairman Nirmal Jain said, "As a leading investor with deep expertise in financial services and wealth management, General Atlantic is well-aligned with our mission and will help to take IIFL Wealth to the next level through expanded products and services."
IIFL Wealth was founded in 2008 by IIFL Holdings Limited with Karan Bhagat, Yatin Shah and Amit Shah. IIFL Wealth has about USD 12 billion worth of assets for over 8,600 clients through its over 150 relationship managers.
