Carlyle Group acquires 9% stake in India Infoline

India Infoline Group (IIFL) announced yesterday that one of the largest global alternative asset managers The Carlyle Group (Carlyle) has acquired a 9% stake in India Infoline Ltd, the flagship company of IIFL, through secondary market purchase of equity shares.

Carlyle becomes a key institutional shareholder in IIFL and will be invited to join IIFL’s Board of Directors to support its future development, subject to necessary approvals. The acquisition cost is not disclosed.

The investment was made by Carlyle Mauritius Investment Advisors Limited, a part of Carlyle Asia Partners (CAP), one of the largest private equity investors in Asia since 1998. CAP has five major investments in the financial services industry in the region encompassing banking, insurance and housing finance businesses, including HDFC in India.

Financial services is a core industry focus at Carlyle, where the firm has made an equity commitment of more than US$ 2 b in Asian financial services businesses. In addition, Carlyle has a significant commitment to India and has had a presence in India since 2000. Carlyle’s broad experience in Asia and internationally will bring added value to the growth at IIFL.

IIFL is one of the top players in the retail and institutional brokerage space with its subsidiaries engaged in Credit & Finance, Wealth Management and Global Advisory services. IIFL offers advisory and execution platforms to more than a million clients, through its wide network of more than 3,000 business locations, across 500 Indian cities and towns.

The brokerage business of IIFL has consistently grown over the years and has a market share of 4% on the National Stock Exchange of India. Under its Credit & Finance business, IIFL offers loan against shares, mortgage loans, housing loans, gold loans and equipment financing and has built a loan book of more than Rs. 39 b (or US$ 778 m) as on 30 June 2011.

Under Wealth Management, IIFL offers advisory and portfolio management services to high net worth individuals and corporate clients with its assets under advisory (AUA) exceeding Rs. 240 b (or US$ 4.8 b). IIFL recently started its domestic asset management business with the launch of IIFL Mutual Fund. Under Global Advisory and distribution business, IIFL has a presence in the U.S., London, Dubai, Singapore and Sri Lanka. The Group is also the first Indian broker to receive membership for stock brokerage at the Colombo and Singapore Stock Exchanges.

IIFL Chairman Nirmal Jain said: “We are delighted to welcome Carlyle, a globally renowned fund, as a shareholder and partner in our growth. Carlyle has made a number of successful investments in financial institutions and has always shown a long-term orientation. We hope to leverage our relationship with Carlyle to continuously grow and expand internationally.”

“We are delighted to partner with India Infoline and their management team. IIFL has built a leadership franchise with a nationwide distribution network in equity brokerage, insurance distribution and wealth management. We are particularly impressed by their ability to attract and groom management talent. We look forward to supporting the company’s growth plans including expansion of their financing and international businesses. We remain committed to investing in India,” said Devinjit Singh, Managing Director of The Carlyle Group.