IIFL Holdings rallies on open offer and hits 52-week high

The shares of IIFL Holdings rallied about 20 per cent on Tuesday (14th July) to touch a one year high. This is in response to an open offer made by FIH Mauritius Investments, a wholly-owned subsidiary of Fairfax India Holdings Corporation to buy 26 per cent stake of the company. The stock closed yesterday at Rs 188 and touched Rs 225.60 in the BSE on Tuesday.

IIFL on Tuesday announced BSE that, ICICI Securities on behalf of the FIH Mauritius Investments collectively with HWIC Asia Fund, I Investments and FIH Private Investments made an open offer to the shareholders of the company, for acquisition of 8.32 crore Equity Shares having a face value of Rs 2 each, which consists almost 26 per cent stake of the IIFL. The offer price is Rs 195 per equity share, which is at about 4 per cent premium of Monday's (13th July) closing of Rs 188 in BSE. As per the SEBI regulations the total consideration payable will be Rs 1621 crore. As per the media reports Nirmal Jain, Chairman of the IIFL group indicated that, with this offer they (FIH Mauritius Investments) are not going to participate in the management or have a control in the company.

FIH Mauritius Investments is a wholly-owned subsidiary of Fairfax India Holdings Corporation, which is controlled by billionaire Prem Watsa. A 64 year old Watsa born in Hyderabad and popularly known as 'Canada's Warren Buffett.' According to the media reports Fairfax India is aiming at least six investments in the country to gain significant influence or control through its holdings and targeting publicly listed companies from infrastructure, consumer-services, retail and exporting industries.

IIFL formerly known as India Infoline, operates in financial services covering products ranging from equities and derivatives, commodities, wealth management, asset management, insurance, fixed deposits, loans, investment banking, gold bonds and other small savings instruments. IIFL had reported 60 per cent year-on-year growth of consolidated net profit in FY15, which stood at Rs 447.33 crore compared to Rs 278.08 crore in FY14. Also reported net sales of Rs 3653.69 crore for FY15, as against Rs 2821.90 crore in FY14.

According to the financial reports of FY15, submitted to the BSE, the promoters hold 29.77 per cent stake of the company, while institutions (including FII and DII) hold 40.05 per cent and non-institutions hold 30.18 per cent stake of the company.