Fairfax plans to combine all of its interests in the insurtech company Go Digit and wealth management company IIFL Capital into IDBI Bank to make the lender into a holistic financial services provider.
- In Go Digit, Fairfax currently holds a 49% stake. A separate internal corporate restructuring approved by the CCI could eventually increase this to 57.28%.
- In IIFL Capital, Fairfax currently holds a 30.2% stake. It is in the process of raising this to 51%.
- Prem Watsa of Fairfax said that IDBI Bank’s excess capital would be used to acquire Go Digit and IIFL Capital at market prices.
- Watsa said Fairfax does not plan to combine or rebrand the operations. “We have never believed in synergies,” he said, emphasizing Fairfax’s decentralized-management approach.
- There would not be any change in governance, management or operating structure of either Digit or IIFL Capital resulting from the proposed contribution transactions.
- The current leadership team at Digit, led by Kamesh Goyal, would remain in place. Likewise the management team of IIFL Capital, led by R Venkataraman, Vasudev Jagannath and Nemkumar H would continue.
- The transaction requires approvals from the Reserve Bank of India, the Securities and Exchange Board of India and the Insurance Regulatory and Development Authority of India.