Blackstone will invest ₹5,000 crore in IIFL Finance for a 16% stake. IIFL announced this on Tuesday as part of a larger ₹6,414-crore capital raise. Nirmal Jain said, "Their investment is a strong endorsement of the franchise our team has built." This move helps the company expand its lending business.
Mumbai: Blackstone, the world's largest alternative asset manager, will invest ₹5,000 crore in IIFL Finance Ltd for a stake of about 16% on a fully diluted basis, as the non-banking financial company (NBFC) looks to strengthen its balance sheet and expand its lending business.
IIFL announced the investment on Tuesday as part of a ₹6,414-crore capital raise, marking one of India's largest private equity infusions into a listed Indian NBFC.
The announcement came after market hours. Shares of IIFL Finance closed 0.5% lower at ₹626.65, while benchmark Nifty 50 ended 0.2% higher.
Blackstone's investment, equivalent to $535 million, will be made through compulsorily convertible preference shares (CCPS) that will convert into equity shares at ₹602 apiece, in line with regulatory pricing requirements, within 18 months of allotment.
Earlier in the day, The Economic Times (ET) reported that Blackstone was preparing to acquire a 15% stake for ₹5,000 crore, with promoters Nirmal Jain and R. Venkataraman investing around ₹1,200 crore to maintain their combined holding at around 25%.
The report also said that Mumbai-based investor Rohit Kothari, through Anchorage Capital, would participate in the transaction.
Under the final structure, Jain and Venkataraman will invest ₹1,264 crore through preferentially allotted warrants, while Anchorage Capital will contribute another ₹150 crore through a primary equity investment, the company said.
The capital infusion is expected to significantly strengthen IIFL Finance's balance sheet, with its capital adequacy ratio projected to rise from about 17% to 30% on a pro forma September 2026 basis.
The additional capital will support IIFL's expansion across its secured lending businesses, particularly gold finance, and could improve credit ratings and reduce borrowing costs over time, said the company.
"We are delighted to welcome Blackstone as a partner in IIFL Finance. Their investment is a strong endorsement of the franchise our team has built," said Nirmal Jain, founder and managing director of IIFL Finance.
He said the partnership would provide the company with the headroom to scale its businesses, invest further in technology and deepen co-lending partnerships with banks while maintaining risk discipline.
The deal comes amid IIFL Finance's improving operating performance. Its consolidated assets under management (AUM) was at ₹1.24 trillion as of 30 September, up 38% year-on-year. Net revenues were at ₹2,340 crore, while profit after tax before minority interest rose 93% to ₹805 crore.
The NBFC's gross non-performing assets ratio improved to 1.48% from 2.14% a year ago, while return on equity was at 20.8%. Gold loans accounted for 52.9% of the consolidated loan AUM at ₹65,729 crore, up 90% year-on-year.
The Blackstone transaction comes after months of negotiations with potential investors. ET had reported that Advent International, TPG and Temasek were among those exploring the investment. The company had last raised equity capital through a ₹1,272-crore rights issue in May 2024.
The proposed transaction remains subject to customary regulatory and shareholder approvals.