US private equity firm Carlyle Group took hold of 9% stake in India Infoline from the open market for about $38 million, to gain foot hold in India’s burgeoning financial and brokerage services space.
IIFL shares appreciated 2.5% on the Indian bourses at Rs.71.35 on Wednesday afternoon. Post-stake acquisition, Carlyle will now be invited to join IIFL’s Board to support its future plans, according to a report on the IIFL newsletter.
IIFL Chairman Nirmal Jain said:
“We are delighted to welcome Carlyle, a globally renowned fund, as a shareholder and partner in our growth. Carlyle has made a number of successful investments in financial institutions and has always shown a long-term orientation. We hope to leverage our relationship with Carlyle to continuously grow and expand internationally.”
Indian retail and institutional brokerage space is seeing increased activity over the last few years due to its potential to penetrate deep in rural and semi-urban markets. Couple of years back, IDFC had acquired a majority stake in IDFC-SSKI Securities to diversify its assets from its core business of infra lending.
Recently, even Axis Bank had merged with Enam’s investment banking and broking businesses. The deal size was pegged at over Rs.2000 crore for the premium brokerage business of Enam.