IIFL Finance to raise up to INR 10 billion via bonds

By Leandra Monteiro

IIFL Finance, a non-banking financial company has announced it will open a public issue of bonds on March 03, 2021, to raise up to INR 10 billion, for the purpose of business growth and capital augmentation. The bonds offer up to 10.03% yield and high degree of safety.

Fairfax and CDC Group backed IIFL Finance will issue unsecured redeemable non-convertible debentures (NCDs), aggregating to INR 1 billion, with a green-shoe option to retain over-subscription up to INR 9 billion (aggregating to a total of INR 10 billion). The IIFL Bonds offer highest yield of 10.03% p.a. for tenor of 87 months. The NCD is available in various options like monthly, annual and at maturity.

Rajesh Rajak, CFO, IIFL Finance said, “Through a strong physical presence of 2500 branches across India and a well-diversified retail portfolio, IIFL Finance caters to the credit need of underserved population. The funds raised will be used to meet credit need of more such customers and accelerate our digital process transformation to enable a frictionless experience.” He went on to add, “IIFL has an impeccable track record of more than 25 years and all the bond issues and the debt obligations have always been paid on time.”

IIFL Finance is an Indian retail-focused financial services companies with 90% of their book is focused on small ticket loans in retail. The company had a gross NPA of 1.61% and Net NPA of 0.77%. Total Capital Adequacy Ratio (CAR) stood at 21.4% at the end of December, 2020, including Tier I capital of 18.0%, as against the statutory requirement of 15% and 10% respectively. In Q3 FY21, IIFL Finance reported a profit after tax of INR 2.68 billion, up 26% on year with a robust return on equity of 18.4%. It has strong relationship with multiple banks and financial institutions.

The lead managers to the issue are Edelweiss Financial Services Limited, IIFL Securities Limited and Equirus Capital Private Limited. The NCDs will be listed on the BSE Limited and National Stock Exchange of India Limited (NSE), to provide liquidity to investors.