Bain buys minority stake in India's IIFL Wealth
Bain Capital has paid INR 33.8bn (USD 484m) for a 24.98% stake in India’s IIFL Wealth Management, taking out positions held by General Atlantic and Fairfax India Holdings.
The private equity firm agreed to acquire 22.16m shares for INR 1,661 apiece, according to a filing. General Atlantic and Fairfax aren’t necessarily making full exits. As of March, the former held 18.6m shares, or a 21.2% stake, while the latter had 12.1m shares, or 13.8%. IIFL Wealth Management’s stock closed at INR 1,705 on April 1, up 2.16% for the day.
It is the second sizeable private equity deal in India’s wealth management this year, following The Blackstone Group’s purchase of a majority stake in Ask Investment Managers for a reported USD 1bn. Advent International exited. In 2020, PAG paid USD 300m for 51% of Edelweiss Group’s wealth management unit, while KKR acquired Avendus Capital, which offers various financial services, in 2018.
General Atlantic paid INR 11.2bn for a 21.61% interest in IIFL Wealth Management in 2015. Fairfax India – an investment subsidiary of Canada’s Fairfax Financial Holdings – picked up 26% for INR 16bn the same year through an open offer. That transaction facilitated an exit for The Carlyle Group, an investor since 2011.
IIFL Wealth Management is one of India’s leading wealth and alternative asset managers. Founded by Karan Bhagat and Yatin Shah in 2008, it offers wealth management, alternate asset management, lending solutions, and estate planning to high net worth individuals (HNWIs) and ultra HNWIs. The company is headquartered in Mumbai and has approximately 900 employees.
Assets under management (AUM) are approximately USD 44bn. In its most recent annual report, IIFL Wealth Management claimed INR 2.07trn (USD 27.3bn) as of March 2021, up from INR 1.38trn a year earlier. This excludes custody assets. Over the same period, revenue rose from INR 8.5bn to INR 10.53bn, while profit jumped from INR 2.06bn to INR 3.69bn.
“The company is well poised to benefit from secular tailwinds of wealth creation in the economy, greater financialisation, and increasing penetration of formal wealth management,” said Pawan Singh, a managing director at Bain.
The private equity firm’s other investments in India’s financial services sector include an INR 68.5bn commitment to Axis Bank in 2017.
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