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MUMBAI: Canadian billionaire Prem Watsa‘s Fairfax group, an early investor in IIFL Finance, has committed to providing up to $200 million in liquidity support to the finance company.
The announcement came as the company’s shares hit the 20% lower circuit for the second consecutive day after RBI barred the lender from extending gold loans, which form nearly a third of its credit portfolio.
Shares of JM Financial also witnessed heavy selling in Wednesday’s market after RBI banned one of its arms from financing IPOs and extending loans against shares. The decision by the banking regulator raises the possibility of the company facing scrutiny by market regulator Sebi, market players said. JM Financial’s shares opened 15% lower and closed 11% down at Rs 85.
In a statement to the exchange, IIFL said that RBI’s embargo has raised liquidity concerns among the company’s investors and lenders. In response to these concerns, Fairfax India has agreed to invest up to $200 million in liquidity support on terms to be mutually agreed upon and subject to applicable laws, including regulatory approvals, if any. The two partners did not disclose whether the investment could be in the form of equity or debt.
“We have been long-term investors in IIFL and have full trust and confidence in the company’s strong management team…,” said Prem Watsa, chairman of Fairfax India.
The announcement came as the company’s shares hit the 20% lower circuit for the second consecutive day after RBI barred the lender from extending gold loans, which form nearly a third of its credit portfolio.
Shares of JM Financial also witnessed heavy selling in Wednesday’s market after RBI banned one of its arms from financing IPOs and extending loans against shares. The decision by the banking regulator raises the possibility of the company facing scrutiny by market regulator Sebi, market players said. JM Financial’s shares opened 15% lower and closed 11% down at Rs 85.
In a statement to the exchange, IIFL said that RBI’s embargo has raised liquidity concerns among the company’s investors and lenders. In response to these concerns, Fairfax India has agreed to invest up to $200 million in liquidity support on terms to be mutually agreed upon and subject to applicable laws, including regulatory approvals, if any. The two partners did not disclose whether the investment could be in the form of equity or debt.
“We have been long-term investors in IIFL and have full trust and confidence in the company’s strong management team…,” said Prem Watsa, chairman of Fairfax India.
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