Blackstone will buy about 16 per cent of IIFL Finance for 50 billion rupees, around $535 million, the Indian non-bank lender said on Tuesday, in the latest big foreign bet on India's fast-growing credit market. Reuters reported the deal on 10 November.

The investment will be made through compulsorily convertible preference shares and forms part of a wider 64.14 billion rupee capital raise, worth about $682.87 million. Existing shareholders Nirmal Jain and R. Venkataraman will invest a further 12.64 billion rupees, while Anchorage Capital will add 1.5 billion rupees.

Capital buffer to nearly double

IIFL said the new capital will lift its capital adequacy ratio to about 30 per cent, from 17 per cent at present. The extra cushion will support growth in its secured lending businesses, particularly gold finance, and the company said it could help improve its credit ratings and lower borrowing costs over time.

The deal gives Blackstone access to some of India's fastest-growing lending segments, including loans against gold and credit for small businesses. IIFL had assets under management of 1.24 trillion rupees on a consolidated basis at the end of September.

Foreign money returns to Indian lenders

The investment comes as foreign investors return to Indian equities in force, with overseas funds buying $5.68 billion of Indian shares so far in November, their largest monthly purchase since September 2024, according to Reuters reporting cited by TradersUnion. Global firms have been increasing their exposure to Indian financial companies as the country's credit market expands.

The transaction remains subject to the usual closing conditions. Neither company has disclosed a completion date.