Canadian investor Prem Watsa's Fairfax India Holdings Corp FIHu.TO plans to increase its stake in Indian financial services firm IIFL Holdings Ltd IIFL.NS to up to 26 per cent for $225 million through a share tender offer.
Fairfax India, a fund Hyderabad-born Watsa set up last year to boost India investments, said its Mauritius unit would buy about 83 million shares of IIFL at 195 rupees each, a premium of 3.6 percent over the Indian firm's close price on Monday.
Fairfax India's parent Fairfax Financial Holdings Ltd FFH.TO already owns about 8.97 per cent of IIFL, and has an economic interest of another 5.24 per cent through derivative instruments, the fund said.
It expects the offer to close later this year.
"IIFL, under the independent leadership of its executive chairman, Nirmal Jain, has an impressive management team with a strong, long-term history of profitable growth, which fits within our strategy for investing in well-managed companies with high integrity and long-term track records in India," said Prem Watsa, Fairfax India's chairman.
IIFL is a diversified financial services holding company, with business interests in non-banking finance, housing finance, wealth management, retail broking, institutional equities, investment banking and insurance distribution.
Shares of IIFL jumped more than 10% to Rs 208 on the BSE on Tuesday following the announcement.