NCLT approves demerger of IIFL Group into 3 Entities

The National Company Law Tribunal (NCLT) has approved the proposed demerger of Fairfax-backed IIFL Group, which paves the way for listing of three entities — IIFL Finance, IIFL Wealth and IIFL Securities on the bourses within 60 days.

As per the arrangement, for every seven shares of IIFL Holdings — the listed company — a shareholder will get seven shares each of IIFL Finance and IIFL Securities, and one share of IIFL Wealth.

As per the existing shareholding structure, promoters have 28.95 per cent stake in IIFL Holdings, Fairfax holds 35.3 per cent, FPIs 23.36 per cent and retail 10.38 per cent.

At present, IIFL Holdings’ loans and mortgages business has an asset under management in excess of Rs 36,000 crore. The company is aiming at a growth of 20-25 per cent in FY19. Shares of IIFL have gained 10 per cent in the past month.

Canadian billionaire investors Prem Watsa of Fairfax is bullish on IIFL on expectation of likely demerger later this year. While commenting on the company last week, he said that with the price correction of around 55 per cent from its 2018 high of Rs 854, IIFL was recently selling at a price to estimated March 2020 earnings ratio of only 11 times and a price to estimated March 2020 BVPS of only 1.7 times

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Economic Times