Blackstone Inc is among global investment firms in the fray to buy a stake in IIFL Finance, just as Fairfax Financial Holdings looks to exit from the company, according to people familiar with the matter.Fairfax, founded by Indian-born Canadian billionaire Prem Watsa, is weighing selling its entire holding in IIFL Finance to comply with regulatory guidelines as it inches towards acquiring IDBI Bank, said the people, asking not to be named discussing private matters. The plans for IIFL Finance are preliminary and could be subject to change, they added.Blackstone is in talks with Fairfax and other shareholders to acquire the stake in IIFL Finance, the people said. The private equity firm’s potential involvement comes at a time when India’s financial services industry has become a target for acquisitions. Last year, the US alternative investment manager invested more than $700 million for a 9.9% stake in Federal Bank.Fairfax and IIFL Finance did not immediately respond to separate requests for comment. Blackstone declined to respond.Fairfax held a 15.2% stake in IIFL Finance as of June 30, according to data compiled by Bloomberg, with the Indian firm having a market value of $2.9 billion. The stock erased gains of as much as 2.4% to trade 1.2% lower on Monday.Fairfax’s move underscores how it is gearing up to acquire a 60.7% stake in IDBI Bank in a sweetened offer that Indian authorities are close to accepting, people have previously said. A successful bid for the Mumbai-based lender could be valued at $6.2 billion at current prices, potentially making it the biggest foreign investment in the country’s banking sector.Buyers are drawn by the growing flow of household savings into formal investments, rising credit demand and the opportunity to scale in a rapidly digitising market, though regulations often complicate deals.If Fairfax acquires IDBI Bank, it is expected to consolidate some of its existing Indian investments in lending firms in line with regulatory rules, according to the people. Fairfax also owns a 40% stake in small private-sector lender CSB Bank.(This is a Bloomberg story)
