PE biggies, Kotak Bank sounded out for IIFL Wealth stake sale
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Synopsis
Canadian billionaire Prem Watsa's Fairfax Holdings and General Atlantic (GA) are looking to sell around 34.6 % stake that they hold together in IIFL Wealth. This would be second domestic sale of such independent wealth manager in 1 year after Blackstone acquired 74% in ASK Group for $1 billion, last August.
Canadian billionaire Prem Watsa's Fairfax Holdings and General Atlantic (GA) are looking to sell around 34.6 % stake that they hold together in IIFL Wealth.
This would be second domestic sale of such independent wealth manager in 1 year after Blackstone acquired 74% in ASK Group for $1 billion, last August.
As on Tuesday's market capitalisation, 34.6% of IIFL Wealth is valued at ₹4,892.1 cr. The transaction may also result in a mandatory open offer to public investors to acquire an additional 26% stake.
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General Atlantic had acquired a 21.6% stake in IIFL Wealth in October 2015 for ₹1,122 crore. Led by India-born Prem Watsa, Fairfax first invested in IIFL in 2011 when it acquired a 9% stake through Hamblin Watsa Investment Counsel Fund. The fund currently has around 13.6% in IIFL Wealth.
Headquartered in Mumbai, IIFL Wealth & Asset Management has more than 850 employees and a presence in 4 major global financial hubs and 23 locations in India.
IIFL Wealth reported revenues of ₹1,053 cr in FY21, compared to ₹850 cr posted during the same period a year ago. Profit after tax was at ₹369 cr as against ₹206 cr, in FY20.
"The franchisee built over the years has helped ensure low client attrition (among Indian wealth managers)," ICRA said in a note on Jan 22. "the company is expected to maintain its strong position in wealth management. The company's profitability also remains strong. With the significant increase of 37% in the AUM, the revenues were higher in H1 FY2022 at ₹666 crore (up 37% YoY) while the cost-to-income ratio declined to 49.1% (54.3% in H1 FY2021)," Icra said.
IIFL had acquired Chennai-based wealth management company, Wealth Advisors India for ₹253.6 crore in cash in 2018. Further, the company purchased the wealth business of L&T Finance for ₹230 crore in 2020.
Wealth Management industry is suddenly become acquisition target with Blackstone buying out ASK Investment Advisors in February in a $1.2 bln deal.