Fairfax India's parent, Canada's Fairfax Financial Holdings, already owns around 8.97 per cent of IIFL and has an economic interest in another 5.24 per cent through derivative instruments, the company said.

The offer, made by the Indian subsidiary's Mauritius unit, involves around 83 million equity shares of IIFL at a price of INR 195 ($3.07) per share. The offer is expected to close later this year subject to regulatory approvals.

“IIFL, under the independent leadership of its executive chairman, Nirmal Jain, has an impressive management team with a strong, long-term history of profitable growth, which fits within our strategy for investing in well-managed companies with high integrity and long-term track records in India,” said Fairfax India's chairman, Prem Watsa.

Over the year to the end of March 2015, IIFL generated INR 22.2 billion in revenue and INR 4.8 billion in earnings.

Fairfax India, which was set up last year to invest in businesses in India, raised more than $1 billion when it went public in Toronto in January 2015.