IIFL Capital Services Limited conducted its Q4 FY26 earnings conference call on May 05, 2026, with Managing Director R. Venkataraman and CFO Ronak Gandhi addressing analysts on the company's financial performance, business developments, and regulatory matters. The call took place against a backdrop of heightened global volatility, with Venkataraman noting record FPI outflows in March and acknowledging the resilience of domestic flows in cushioning foreign selling pressure.

Full-Year FY26 Financial Performance

For the full year FY26, IIFL Capital Services reported consolidated operational revenue of ₹2,439 crores, virtually flat on a year-on-year basis. The performance across key revenue segments reflected a mixed picture, with retail equity revenues declining due to regulatory headwinds while institutional and distribution businesses posted growth.

Retail equity revenues declined 9% to ₹1,121 crores, primarily due to the full-year impact of SEBI regulatory changes that came into effect in the first quarter of the last calendar year. Institutional and investment banking revenues grew 11% to ₹712 crores, while financial product distribution income rose 16% to approximately ₹590 crores. Employee costs increased steeply to ₹687 crores, driven by higher headcount, variable pay provisioning, and a one-time charge of ₹7 crores related to a change in Labour Law. Finance costs rose 17% to ₹210 crores on account of increased working capital requirements linked to growth in the margin trade funding (MTF) book. Depreciation increased 20% due to investment in branches and technology. Operational PBT declined 22%, primarily driven by the increase in employee expenses. Other income stood at approximately ₹164 crores, which included a gain of approximately ₹90 crores from the sale of real estate held in IIFL Facility, a subsidiary of the holding company.

Q4 FY26 Quarterly Performance

On a year-on-year basis, Q4 FY26 demonstrated strong revenue recovery across most segments. The following table summarises the key quarterly comparisons:

Institutional and investment banking revenues rose sharply to ₹162 crores from ₹97 crores in Q4 FY25, driven by growth in both investment banking and broking income. FPD income of ₹182 crores was down 4% YoY, as Q4 FY25 had benefited from elevated brokerage related to certain NSE share transactions. Finance costs surged 45% to ₹63 crores due to MTF book expansion. Fees and commission expenses increased 40% on account of record sub-broker payouts. Operational PBT before MTM changes was up 14% on a year-on-year basis.

Sequential Comparison: Q4 FY26 vs Q3 FY26

On a sequential basis, operational revenue grew 10% in Q4 FY26. FPD income posted a strong 36% sequential increase to ₹182 crores, while institutional broking revenue remained virtually unchanged. Operational PBT improved 21% quarter-on-quarter.

Trading Volumes and FPD AUM Growth

Average daily turnover for Q4 FY26 stood at approximately ₹3,22,886 crores, comprising approximately ₹3,20,011 crores in F&O and ₹2,875 crores in cash. This compared to approximately ₹3,14,660 crores in Q3 FY26, with F&O at approximately ₹3,12,000 crores and cash at approximately ₹2,685 crores, representing approximately 3% growth.

Financial product distribution AUM witnessed significant expansion, growing from ₹31,000 crores to approximately ₹52,000 crores. Mutual fund assets within this grew from ₹14,000 crores to approximately ₹21,000 crores. The Ultra HNI wealth management channel, which the company has set up, accounts for approximately ₹12,000 crores of the total AUM. The company currently has approximately 50 wealth relationship managers and approximately 300 affluent or PCG broking relationship managers.

Income Tax Notices and Capital Position

The company disclosed that the income tax department conducted a search under Section 132 of the Income Tax Act. An ad-hoc payment of approximately ₹27 crores was made in the last quarter related to block assessment. Subsequently, notices of approximately ₹56 crores combined were received for IIFL Management and IIFL Facilities for the block period from April 1, 2018 to February 3, 2025. The respective companies are in the process of filing appeals against the orders. Assessment proceedings for the holding company are still in progress, with no orders or demand notices received to date. Management stated that, after considering available facts and consulting advisers, there is expected to be no material adverse impact on the financial position of the group, and no adjustments have been made.

On capital adequacy, Venkataraman noted that the company's net worth has grown from approximately ₹1,000 crores to over ₹3,000 crores over the past four years, primarily through internal accruals. The bulk of capital has been deployed in broking, MTF, and exchange margins. Management indicated that the company has sufficient capital to support approximately 20% growth in the near term. The company also disclosed the closure of its Capital Credit Opportunities Fund, having raised approximately ₹500 crores.

IIFL Capital Services Limited has filed the complete notice for its Extraordinary General Meeting (EGM) scheduled for Monday, June 1, 2026, at 11:30 a.m. (IST), to be conducted via Video Conferencing (VC) / Other Audio Visual Means (OAVM). The EGM notice, filed pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, seeks shareholder approval for two special resolutions: the preferential issue of equity shares to FIH Mauritius Investments Ltd (a wholly owned subsidiary of Fairfax India Holdings Corporation) and the alteration and adoption of the Articles of Association (AOA) to incorporate terms of the Investment Agreement dated May 7, 2026. The EGM notice was electronically dispatched to members whose email addresses were registered as of the cut-off date of May 6, 2026, and is also available on the company's website, BSE, NSE, and CDSL (evotingindia.com). Pursuant to Regulations 30 and 47 of the SEBI Listing Regulations, the company published newspaper advertisements on May 10, 2026 in Financial Express (English), The Free Press Journal (English), and Navshakti (Marathi), disclosing the dispatch of the EGM notice along with details relating to remote e-voting, e-voting at the EGM, and the record date. The Company Secretary, Meghal Shah, confirmed the dispatch was completed on May 09, 2026 from Mumbai.

EGM and Voting Details

The proceedings of the EGM shall be deemed to be conducted at the Registered Office of the Company, which shall be the deemed venue. The company has provided a remote e-voting facility commencing on May 27, 2026, at 9:00 a.m. (IST) and ending on May 31, 2026, at 5:00 p.m. (IST). Members eligible to vote are those whose names appear in the Register of Members as on the cut-off date of May 25, 2026. Members who have already cast their votes through remote e-voting may attend the EGM but shall not be permitted to vote again during the meeting. The Board has appointed CS Snehal Shah & Associates (Membership No. FCS 6114) as the Scrutinizer to oversee the e-voting process, with consolidated results to be declared within two working days from the conclusion of the EGM.

Transaction Overview

The Board, at its meeting held on May 7, 2026, approved the issuance of 5,71,42,857 fully paid-up equity shares at ₹350 per share to FIH Mauritius Investments Ltd, aggregating to INR 1999,99,99,950/-. Concurrently, FIH Mauritius, along with HWIC Asia Fund (Class A Shares) as a Person Acting in Concert (PAC), has announced a mandatory open offer to acquire up to 10,01,44,112 equity shares, representing 26.00% of the Expanded Voting Share Capital, at ₹350 per share. The open offer consideration aggregates up to ₹3,505.04 Crore assuming full acceptance. ICICI Securities Limited is acting as the Manager to the Open Offer.

Pricing and Valuation

The issue price of ₹350 per share was determined in accordance with SEBI (ICDR) Regulations and a Valuation Report dated May 7, 2026, issued by BDO Valuation Advisory LLP. The price is higher than the floor price derived from the following benchmarks, with the Relevant Date set as April 30, 2026:

The Independent Directors Committee (IDC), at its meeting held on May 7, 2026, unanimously approved the issue price as fair and reasonable, with all four independent directors — Mr. Anand Bathiya, Ms. Rekha Warriar, Mr. Shamik Das Sharma, and Mr. V. Krishnan — voting in assent.

Use of Proceeds

The company intends to utilise the issue proceeds of INR 1999,99,99,950/- towards the following objects, with CRISIL Rating Limited appointed as the Monitoring Agency:

As on the date of the notice, the aggregate outstanding borrowings of the company are approximately INR 1,745,00,00,000/-. Lenders include ICICI Bank Limited, HDFC Bank Limited, Aditya Birla Capital Limited, Tata Capital Limited, and Infina Finance Private Limited, as well as commercial papers issued by the company. The total margin deposits with stock exchanges stood at ₹4018.63 Crore as on March 31, 2025, rising to ₹5221.71 Crore as on March 31, 2026.

Shareholding and Control

Prior to the preferential issue, FIH Mauritius Investments Ltd holds 8,46,41,445 equity shares constituting 27.18% of the pre-Preferential Issue paid-up share capital, while HWIC Asia Fund (Class A Shares) holds 1,03,62,530 equity shares representing 3.33%. Post the preferential issue, FIH Mauritius's shareholding is expected to increase to 14,17,84,302 shares, representing 38.47% of the post-issue capital. Upon completion of the preferential issue and open offer, FIH Mauritius's holding is expected to reach 62.81% of the Expanded Voting Share Capital. The transaction includes an Investment Agreement ensuring a minimum 51% stake for the acquirer.

AOA Amendment and Board Nomination Rights

The second special resolution seeks approval for the alteration and adoption of the Articles of Association to incorporate the relevant terms of the Investment Agreement, effective from the completion of the underlying transaction and the open offer. Pursuant to completion, the Investor will have the following board nomination rights:

• Until the Investor holds at least 20% of Share Capital: Right to nominate 2 non-executive directors on the Board.
• Until the Investor holds at least 10% of Share Capital: Right to nominate 1 non-executive director on the Board.

The acquirer will be classified as a 'promoter' post-transaction, and HWIC Asia Fund (Class A Shares) shall be classified as a member of the promoter group. The Board has recommended both special resolutions for member approval. The Detailed Public Statement (DPS) is expected to be published on or before May 14, 2026.