Mumbai, Nov. 10 -- Blackstone, the world's largest alternative asset manager, will invest Rs.5,000 crore in IIFL Finance Ltd for a stake of about 16% on a fully diluted basis, as the non-banking financial company (NBFC) looks to strengthen its balance sheet and expand its lending business.

IIFL announced the investment on Tuesday as part of a Rs.6,414-crore capital raise, marking one of India's largest private equity infusions into a listed Indian NBFC.

The announcement came after market hours. Shares of IIFL Finance closed 0.5% lower at Rs.626.65, while benchmark Nifty 50 ended 0.2% higher.

Blackstone's investment, equivalent to $535 million, will be made through compulsorily convertible preference shares (CCPS) that will convert into...