IIFL Finance Limited to Raise up to Rs. 1,000 Crore via Secured NCDs, Offers up to 9% Yield

IIFL Finance Limited to Raise up to Rs. 1,000 Crore via Secured NCDs, Offers up to 9% Yield

IIFL Finance Limited (“IIFL/IIFL Finance”), one of India’s largest Non-Banking Financial Companies, will open a public issue of Secured Non-Convertible Debentures (NCDs) on January 6, 2023, to raise up to Rs. 1,000 crore, for the purpose of business growth. The NCDs offer up to 9% yield and high degree of safety.

The Fairfax-backed IIFL Finance will issue secured redeemable NCDs, aggregating to Rs 100 crore, with a green-shoe option to retain over-subscription up to Rs 900 crore (aggregating to a total of Rs 1,000 crore).

The IIFL NCDs offer highest effective yield of 9% per annum for tenor of 60 months. The NCDs are available in tenors of 24 months, 36 months and 60 months. The frequency of interest payment is available on monthly, annual and at maturity basis for 60 months tenor, while for other tenors it is available on annually and at maturity basis.

The credit rating has been AA/Stable by Crisil and AA/Stable by ICRA, which indicates that the instruments are considered to have a high degree of safety for timely servicing of financial obligations and carry very low credit risk.

Mr Kapish Jain, CFO, IIFL Finance said, “Through a diversified multi-channel distribution network and a strong physical presence of over 3,700 branches across India, IIFL Finance caters to delivering small loans to sound under-banked people and enterprises in India. The funds raised will be used to meet credit need of more such customers.”

He added, “IIFL has an impeccable track record of close to three decades and all the NCD issues and debt obligations have always been timely serviced, abled by strong liquidity management framework.”

IIFL Finance is one of India’s largest retail-focused financial services companies. IIFL Finance’s consolidated Loan Assets under Management is Rs 55,302 crore as on September 30, 2022. Most importantly, 95% of the book is retail - which is focused on small ticket loans.

IIFL Finance has consistently maintained low level of NPAs over the years of operations and continues to focus on good quality of assets with gross NPA of 2.42% and Net NPA of 1.22%. Additionally, as on September 30, 2022, 85.03% of the company’s consolidated loan book is secured with adequate collaterals which helps to mitigate risks further.

In Q2 FY23, IIFL Finance reported a consolidated profit after tax of Rs 397 crore, up 36% year-on-year with a robust return on equity of 20.4%. It has strong relationship with multiple banks and financial institutions.

The lead managers to the issue are Edelweiss Financial Services Limited, IIFL Securities Limited, Equirus Capital Private Limited and Trust Investment Advisors Private Limited. The NCDs will be listed on the BSE Limited and National Stock Exchange of India Limited (NSE), to provide liquidity to investors. The IIFL NCDs would be issued at face value of Rs 1,000 and the minimum application size is Rs 10,000 across all categories. The public issue opens on January 6, 2023 and closes on January 18, 2023, with an option of early closure. The allotment will be made on first come first served basis.