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Blackstone, the world's largest alternative asset manager, will acquire an approximately 16 percent stake in IIFL Finance on a fully diluted basis through a Rs 5,000-crore investment, as part of a Rs 6,414-crore fundraise by the non-banking financial company (NBFC), according to a statement issued on November 10.

The board of IIFL Finance approved the capital raise through a preferential issue at its meeting on November 10. The transaction, subject to regulatory and shareholder approvals, is among the largest primary private equity investments in a listed Indian NBFC.

Blackstone will invest Rs 5,000 crore ($535 million) through a preferential allotment of compulsorily convertible preference shares (CCPS). These shares will be converted into equity shares at Rs 602 apiece within 18 months of allotment, giving Blackstone an approximately 16 percent stake in the company on a fully diluted basis, the statement said.

Moneycontrol had on November 9 reported that Blackstone was leading the race to acquire a 15 to 16 percent stake in IIFL Finance through a $500-600 million equity investment.

The company's promoters, Nirmal Jain and R Venkataraman, will invest Rs 1,264 crore ($135 million) through a preferential allotment of warrants, continuing as co-promoters alongside Blackstone. Anchorage Capital will also participate in the transaction with a primary equity investment of Rs 150 crore ($16 million).

IIFL Finance and its promoters have entered into definitive agreements with Blackstone and Anchorage Capital for the proposed investments.

The entire investment will be infused as primary capital, taking the company's capital adequacy ratio from around 17 percent to approximately 30 percent on a pro forma basis as of September 2026, according to the statement.

“The investment strengthens our balance sheet and gives us the headroom to scale our franchises, invest further in technology, and deepen our co-lending partnerships with banks, while staying disciplined on risk and capital,” Nirmal Jain, founder and managing director of IIFL Finance, said.

The capital infusion is expected to strengthen IIFL Finance's balance sheet, improve its cost of funds and accelerate growth across its secured lending businesses, particularly its gold finance segment. It will also support the company's ambition to become one of India's largest diversified retail NBFCs.

The company expects to leverage Blackstone's global scale, network and operational expertise in technology, data and artificial intelligence to expand its secured lending businesses, attract and retain talent, and strengthen its overall franchise.

The proposed appointment of Blackstone representatives to IIFL Finance's board is expected to further strengthen corporate governance and oversight while preserving the company's entrepreneurial culture and focus on execution.

“Building great businesses has been central to our approach over more than two decades of investing in India, and we look forward to partnering with Nirmal, Venkat and the management team to support IIFL Finance's continued growth,” Mukesh Mehta, chief investment officer for India Private Equity and senior managing director at Blackstone, said.

IIFL Finance shares closed at Rs 627 on Monday, above the Rs 602 at which Blackstone will invest. The stock has gained about 3 percent this year.

Foreign investors are stepping up their bets on Indian financial firms, drawn by strong credit demand and the growing wealth of the country’s middle class. Abu Dhabi’s International Holding Co. and Japan’s Mitsubishi UFJ Financial Group Inc. are among the global investors that have recently bought stakes in Indian shadow lenders, highlighting the sector’s growing appeal.

With Bloomberg inputs