Fresh off a cenbank ban, India's IIFL Finance plans $1.2 bln fundraise via bonds, official says

IIFL Finance

24/09/2024 13:17

By Siddhi Nayak and Dharamraj Dhutia
       MUMBAI, Sept 24 (Reuters) - India's IIFL Finance
 IIFL.NS  plans to raise 100 billion rupees($1.20 billion) via
debt in the next six months and diversify both its borrowing
sources and business, a top official said on Tuesday, as the
non-bank lender looks to recover from a recent ban.
    In March, India's central bank had ordered IIFL Finance to
stop sanctioning and disbursing gold loans, citing "material
supervisory concerns". The ban was lifted last week.
    "As business picks up again, we will have to reassess our
requirement for funds," Nirmal Jain, founder and managing
director, told Reuters in an interview. "We do not need equity
capital for now; we may need debt."
    Besides rupee-denominated debt, IIFL Finance will also
explore the dollar-bond route and go for a public issue of bonds
"at some point" later this financial year, Jain said.
    As of June-end, more than 50% of IIFL Finance's borrowings
came from banks, while about 24% were from non-convertible
debentures, data showed.
    The company is aiming to reduce bank borrowing to under 50%,
thereby diversifying its borrowing mix, Jain said.
    "50-60% of our incremental borrowing mix may come from
external commercial borrowings, dollar bonds, local bonds and
other non-bank sources."
    The company is looking to recruit 3,000 to 4,000 people in
the next three months, specifically for the gold loan business,
Jain said.
    But stung by its financial loss for the April-June quarter
after the central bank's ban, the company is also looking to
diversify its loan products to minimise risks.
    Jain said for its next leg of growth, IIFL Finance will also
focus on loans against property, loans to medium and small
enterprises and secured and unsecured business loans.
    The company will also evaluate a proposal to list its
mortgage and microfinance arms, Jain said.
 
 ($1 = 83.6440 Indian rupees)

 (Reporting by Siddhi Nayak and Dharamraj Dhutia; Editing by
Savio D'Souza)
 ((Siddhi.Nayak@thomsonreuters.com; +91 22 6921 7848; Reuters
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