IIFL Capital Services has approved a preferential issue of shares worth around Rs 2,000 crore to FIH Mauritius Investments, a Fairfax-linked entity.

The company will issue 5.71 crore equity shares at Rs 350 per share through a private placement route, according to its stock exchange filing.

Investor stake to rise to 38.47%

FIH Mauritius Investments currently holds a 27.18% stake in the company. After the preferential allotment, its shareholding will increase to around 38.47%.

The transaction will also trigger a mandatory open offer under SEBI takeover regulations. Following the completion of the transaction and the open offer, the investor will acquire control of the company and become part of the promoter group.

According to a regulatory filing by IIFL, an affiliate of the investor, HWIC Asia Fund, currently holds 3.33% stake in the company and will also be classified as part of the promoter group.

Agreement signed with existing promoters

IIFL Capital Services has signed an investment agreement with FIH Mauritius Investments and existing promoters Nirmal Jain and R. Venkataraman.

The agreement includes terms related to the preferential issue and also allows the investor to potentially acquire shares from the existing promoters under certain conditions.

Board approves changes to Articles of Association

IIFL Capital Services has also approved amendments to the company’s Articles of Association (AoA) to include investor rights under the agreement.

As part of the changes, the investor will have the right to nominate two non-executive directors to the board as long as it holds at least 20% stake in the company. If the stake falls below 20% but remains above 10%, the investor can nominate one non-executive director.

EGM scheduled on June 1

The company will seek shareholder approval for the preferential issue and AoA amendments at an Extraordinary General Meeting (EGM) scheduled on June 1, through video conferencing.

About IIFL Capital Services

IIFL Capital Services is one of the key capital market players in the Indian financial services space. IIFL Capital offers broking services, wealth management, financial products distribution, institutional broking,research and investment banking services.