General Atlantic Singapore and Fairfax Financial Holdings are considering to pare their stakes in IIFL Wealth & Asset Management, seeking premium as high 40 percent premium over the existing stock price, sources said on Wednesday.

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Fairfax Financial Holdings, which holds a 13.6 percent stake in IIFL Wealth through FIH Mauritius Investments Ltd, is looking for a larger exit in the stake sale, people privy to the development said on the condition of anonymity as the deal is still under consideration.

"Both the companies are looking for a premium as high as Rs 2,100 per share because there is a lot of interest from private equity (PE) funds as well as high net worth individuals (HNIs). PE fund The Capital Fund might also be interested in buying a stake in IIFL Wealth," one of the sources said.

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However, the quantum of equity stake sale under consideration by these two investors is unknown.

IIFL Wealth's shares closed at Rs 1,473.80 apiece on the BSE on Wednesday, up by 0.11 percent from the previous close.

Given the current market condition and the global geopolitical tensions due to the Russia-Ukraine war, banks are not keen on investing. However, HNIs and private equities (PEs) have shown good interest, the sources said.

When contacted, IIFL Wealth Management declined to comment, while e-mails sent to General Atlantic and Fairfax Financial Holdings did not elicit any responses.

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Nirmal Jain-promoted IIFL Group has three listed entities IIFL Finance, IIFL Wealth and IIFL Securities since a demerger process in 2019 to unlock value. IIFL Wealth was founded in 2008 when Nirmal Jain roped in Kotak Wealth employees Karan Bhagat and Yatin Shah to set up the company.

General Atlantic Singapore Fund Pte Ltd bought 21.6 percent in IIFL Wealth during October 2015 for Rs 1,122 crore, when IIFL Wealth was part of IIFL Holdings. Canada-based Prem Watsa's Fairfax, which invested in IIFL Holdings before the split into three different listed entities, holds a 13.6 percent stake in IIFL Wealth.

The indicative time frame for the closure of the deal could not be ascertained as the negotiations are still going on. To date, IIFL Wealth is India's largest independent wealth manager with over $44 billion assets under management.

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(Edited by : Jomy Jos Pullokaran)

First Published:Mar 9, 2022 5:33 PM IST